Choosing self employed health insurance in Canada starts with three things: your province, your business structure and any benefits you already have. Your options may include a partner’s workplace plan, individual insurance, an association plan or, for eligible businesses and incorporated professionals, a Health Spending Account (HSA).
The aim is to find an arrangement that fits your healthcare needs, budget and ability to handle unexpected costs.
What health coverage do self employed Canadians already have?
Health coverage for self employed Canadians starts with the same provincial or territorial system available to other eligible residents. Working for yourself does not, by itself, remove that eligibility.
Public plans cover medically necessary hospital and physician services, plus certain surgical-dental services. Support for prescriptions, routine dental care, vision and other services varies by province and program.
Check public programs before buying additional benefits. For example, the Canadian Dental Care Plan has income, tax-filing and residency requirements, and requires no access to private dental benefits. Access to an HSA that covers dental costs also counts, even if you have not used it.
Health plans for self employed Canadians: compare your options
When comparing self employed health insurance, consider these ways to help fund healthcare expenses beyond your public benefits.
| Option | What to consider |
|---|---|
| A spouse or partner’s workplace plan | Check whether you can enrol, the added cost, enrolment deadline and available benefits. |
| Individual or family health insurance | Compare the price with the expenses included, reimbursement percentages, exclusions and limits. |
| Professional or trade association plan | Ask whether membership gives you access, then compare its terms with individual plans. |
| An HSA through an eligible business | Reimburse eligible medical and dental expenses within an allowance. Eligibility depends on business structure and plan requirements. |
Partner, individual and association plans have their own eligibility rules. Membership or access to a plan does not automatically make it the best fit.
These options also work differently: insurance pays according to its contract, while an HSA uses employer funding to reimburse qualifying expenses within a documented allowance.
Health insurance for freelancers and sole proprietors
Freelancing describes how you work; your business may be incorporated or unincorporated. If you work alone without a corporation, start by comparing individual plans and any partner or association benefits available to you.
When reviewing sole proprietor health insurance, check whether the plan pays for your current prescriptions and treatments. Some products ask health questions and assess medical history. Others offer guaranteed acceptance, but still have limits and rules about which expenses qualify.
If you’re leaving a job and looking for self employed health insurance, ask about continuation options before your workplace benefits end. Application windows and eligibility differ between products, so confirm the deadline and new start date.
Can a sole proprietor use an HSA?
CRA’s published guidance states that a self-insured HSA for a sole proprietor with no arm’s-length employees is not a qualifying Private Health Services Plan (PHSP). Costs paid into that arrangement are not deductible business expenses.
Buying qualifying private health insurance is a separate option. Sole proprietors may be able to deduct qualifying PHSP premiums under specific rules, subject to business-income conditions and applicable limits.
Can incorporated professionals use an HSA?
An incorporated professional may be able to establish an HSA through their corporation. The arrangement must meet PHSP requirements, and an owner’s benefit must be provided in their capacity as an employee rather than solely because they own shares.
The corporation sets an allowance and funds eligible reimbursements, administration fees and applicable taxes. This can help pay for qualifying dental treatment, prescription eyewear or other eligible expenses, including eligible amounts left unpaid by another plan.
An HSA provides flexibility within that allowance. It does not replace disability income or life benefits, and the available balance may be insufficient for high ongoing medical costs.
For Quebec residents, an HSA alone does not replace required basic prescription drug insurance. Quebec’s provincial tax treatment of HSA benefits also differs from federal treatment.
If this approach fits your business, get started with Wellbytes through a quick, simple digital setup. Incorporated professionals enter their corporation’s details, set an allowance and add employees where applicable.
Health insurance for small business owners with employees
When choosing health insurance for small business owners, separate your personal needs from the benefits you want to offer your team.
Depending on eligibility, you could consider a group plan, an HSA or a combination. Review the total employer commitment, employee contributions, family needs and what happens when someone faces a large expense.
An unincorporated business with arm’s-length employees may have HSA options that are unavailable to a sole proprietor working alone. Confirm the structure and applicable limits before extending the arrangement to the owner.
How to compare self employed health insurance
Start with your expected prescriptions, dental visits, eyewear and treatments. Then consider expenses that would be difficult to pay unexpectedly.
When comparing medical insurance for self employed people, review:
- Annual cost: Add premiums, deductibles and your expected share of claims.
- Specific expenses: Confirm your medications and planned treatments, including any required approvals.
- Limits: Check annual, lifetime and per-service maximums.
- Timing: Review waiting periods, enrolment deadlines and effective dates.
- Family needs: Confirm who can be included and how limits apply.
When reviewing self employed health insurance, remember that a reimbursement percentage tells only part of the story. Annual limits and exclusions can change how much the plan actually pays.
For example, a hypothetical plan paying 80% of eligible dental costs, with a $750 maximum annual reimbursement, would pay at most $750 toward a $1,000 eligible bill, assuming no deductible or other restriction. You would pay the remaining $250, in addition to the plan’s premiums.
Your wider self employed insurance needs may also include protection for income lost during illness or injury. Review that separately from reimbursement for medical bills.
If you’re considering an HSA through your corporation, Wellbytes’ savings calculator can help you explore potential savings. Review the estimate alongside the full plan costs and the benefits you intend to keep.
Are self employed health insurance costs tax-deductible?
Some qualifying PHSP premiums may be deductible from self employment income when CRA’s conditions are met. Other eligible premiums or unreimbursed medical costs may qualify for the medical expense tax credit, subject to its rules.
You cannot claim the same premium as both a business deduction and a medical expense. Costs reimbursed through a non-taxable benefit generally cannot also be claimed for the credit.
Ask your accountant to confirm which treatment applies to your business, and retain your premium statements, receipts and reimbursement records.
