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Posted by Olivier Coiteux, Group Insurance Plan Advisor, March 31 2016
Savings strategies
Cost Plus Program: Reduce Your Tax Bill & Retain Key Employees

Cost Plus Program

A Cost Plus program is simply an agreement providing for the full reimbursement of expenses that are not eligible or not reimbursable under a health or dental care group insurance contract. Who is Cost Plus normally designed for? What are the advantages of setting up such a program? What criteria must be met? How does this type of program work? You will find the answers below.

Who is this program for?

Normally, Cost Plus programs are set up for small business owners. Occasionally, businesses may also set up such programs for key employees. The list of eligible individuals is clearly specified in the agreement.

What are the main advantages?

  1. The reimbursed expenses including fees and taxes normally represent a non-taxable income for employees (except in Quebec, where the amount is considered a taxable benefit by the provincial government only).
  2. The reimbursed expenses including fees and taxes can be tax-deductible business expenses.
  3. Therefore, the use of a Cost Plus program provides substantial tax savings.
  4. Business owners and key employees feel more satisfied with their benefit package.
  5. Claims paid do not affect the group’s rates.

What are the main criteria to consider?

  1. In Quebec, a Cost Plus program can be offered only when a group insurance plan covering prescription drug expenses based on minimum RAMQ criteria is in place.
  2. The Cost Plus program can cover benefits not covered by the plan, non-eligible expenses, deductibles or co-insurance, or expenses in excess of a maximum.
  3. Coverage of dependents is flexible: it can include unusual dependents, such as parents or grandparents, if they are eligible as dependents under the Income Tax Act of Canada.
  4. However, the Cost Plus program cannot be used to pay expenses that cannot be legally reimbursed, such as teeth whitening expenses.
  5. Cost Plus can be used for major expenses such as orthodontics or laser eye surgery.

How does it work?

To set up the program, a simple agreement must be completed and signed to formalize the Cost Plus program. The agreement includes information on covered individuals, eligible expenses, payment conditions, administration fees and applicable taxes.

To file a claim, members simply need to complete the online or paper form and submit their receipts to be promptly reimbursed.

Next step

Do you wish to set up or receive more information on the Cost Plus program, a group insurance plan or a pension plan? Do not hesitate to contact us! Our team of experienced experts will be pleased to address your needs.


Group Insurance Plan Advisor | During 5 years of experience, Oliver succeeded working on processes and concepts that promoted the viability and profitability of group insurance plans to its customers. With his dynamic and innovative approach, Oliver is able to offer high quality expertise focusing on the needs of his partners while optimizing traditional industry practices.
Olivier Coiteux, Group Insurance Plan Advisor