Big decisions need to be made when it comes to aligning your teeth – this has a large impact on your oral health and your self-confidence. And I can also have a significant impact on your wallet. This leaves many people wondering: Can I use my FSA or HSA for Orthodontic Treatment?
The price range for orthodontic treatment is from $1,145 for DIY or at-home aligners to lingual (hidden) braces that usually cost more than $10,000. You see the price range is from rather affordable to rather expensive, thus you will likely need to get creative with how to pay for orthodontic treatment.
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are designed to help cover out-of-pocket medical, vision, and dental expenses — some with certain limitations. The question is: can you use your HSA or FSA to pay for orthodontic treatment?
What exactly Are HSAs and FSAs?
HSAs and FSAs are considered tax-advantaged accounts, which are strictly used to save and pay for qualified medical expenses. And depending on the type of account and the terms determined by the administrator, these funds can be utilized to cover deductibles, copayments, coinsurance, treatments, and prescriptions.
Most are associated with a debit card and permit you to request checks and the accounts function much like a traditional bank account. Generally, you will have access to an online banking platform. The designated funds are limited and can only be applied to qualifying medical expenses.
HSAs are accounts made available to people who have a high-deductible health plan. Each year, the government sets the minimum threshold for what can be considered a high deductible.
These are the requirements to have an HSA:
- High-deductible health plan
- Have only one insurance plan
- Not be eligible for Medicare or Medicaid
- Not be listed as a dependent on anyone’s tax returns
- Be under the age of 65
You can open an HSA on your own or get one through an employer. The funds added to your HSA roll over from year to year, so if you don’t use all the money in your account each year, you’ll still be able to use it later on. The government limits how much money you can contribute each year, and the amount tends to change annually. Consumers can contribute up to the annual maximum amount as determined by the IRS. Maximum contribution amounts for 2022 are $3,650 for self-only and $7,300 for families. The annual “catch-up” contribution amount for individuals age 55 or older will remain $1,000.
HSAs are tax-advantaged, but what that looks like depends on if you open the account on your own or receive it through an employer. If you open it on your own, you can deduct the contributions from your taxes. If it is through your employer, a portion of your salary or wage goes into the account pre-tax.
FSAs are accounts that employers are able to offer as part of their benefits package to their employees — essentially, you are not able open one on your own, and they are tied to the employer. The funds added to an FSA will not roll over from year to year, except for up to $550, depending on the policies of the company you work for.
The IRS sets the threshold for maximum FSA contributions per year. The contribution limits for 2022 are: $5,000 per year per household. $2,500 for married individuals filing a separate tax return. In this type of scenario, the money is pre-tax, meaning it is taken out of your paycheck before taxes are levied.
So what about HSAs and FSAs and Dental Treatment Coverage?
There are limits on what forms of medical care are covered for both HSAs and FSAs. So the basic guidelines are that if something is medically necessary or essential care, it is covered; if it is cosmetic, it is not.
A qualifying expense with regards to dental treatment, is anything that either treats or prevents dental disease or related health concerns. However, if a procedure only addresses aesthetic concerns, it isn’t considered a qualifying.
Why is Orthodontics considered a Grey Area for Coverage
Essential and cosmetic treatment can be subjective, and it can be a thin line in any medical field – this is especially true with orthodontics therapy. It is known that aligning teeth and resolving malocclusions (bad bites) is beneficial for oral health. So yes, braces absolutely can be a medical necessity. There are numerous problems which can be corrected with orthodontics, such as problems that cause pain, tooth decay, gum disease, and more. BUT, these problems can also be cosmetic. For example, dental spacing. Dental spacing may not cause harm regarding oral health but be affecting the patient’s self-esteem.
So let’s put this particular situation into context.
A small gap (diastema) between the top front teeth generally does not cause problems for the bite overall or your oral health. Thus, getting braces to close this gap would be considered a cosmetic treatment. However, if this gap is excessive, it may contribute to the incorrect position of other teeth and hamper their alignment and prevent the front teeth from the top and bottom jaw from occluding (matching up) properly. In a scenario like this, getting braces to correct tooth alignment becomes medically necessary, and is no longer cosmetic.
This means that orthodontic coverage under HSAs and FSAs is ambivalent. You will need a proper orthodontic evaluation and in-depth diagnosis as well as speak with your account administrator to determine if your treatment is a qualifying expense.
Here is a List of Dental Procedures Typically Covered by HSAs and FSAs
- Braces and aligners (in most cases)
- Sealants and bonding
- Fluoride treatments
- Dental cleanings
- X-rays and scans
- Root canals
- Gum surgery
HSA and FSA Braces Coverage
There are a variety of orthodontic appliances for correcting tooth alignment (clear aligners, lingual braces, ceramic braces), however, conventional metal braces tend to be the easiest to get coverage for. Braces are well-established appliances for bite correction and are proven to correct even severe orthodontic malocclusions or abnormalities. You just need to know that every administrator interprets essential vs. cosmetic in different ways.
For your free orthodontic evaluation at Roland Park Orthodontics