Dental Insurance and Orthodontic Benefits.
"Sometimes your joy is the source of your smile, but sometimes your smile can be the source of your joy." -- Thich Nhat Hahn
Your smile should be considered one of your most valuable assets. Crooked and misaligned teeth are hard to clean and maintain. If left untreated your tooth condition may lead to tooth decay, gum disease, and eventual tooth loss. The cost of orthodontic treatment to improve your bite and oral hygiene can be managed more afforably using tax-advantaged financial accounts.
Orthodontic Estimate
A quote that covers the total cost of orthotondict treatment, as well as how long you are able to make payments will allow you to plan your contributions to either type of account (HSA or FSA).
Overview
Dental insurance, medical benefits, and medical savings plans have very different uses when it comes to orthodontic treatment. Dental insurance is specifically designed to encourage preventative treatments and when included with an employer’s medical plan may have no or very low lifetime cap for orthodontic treatment. The most common types of medical savings plans are described below.
FSAs are one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan of an employer. Thus, allowing an employee to set aside a portion of earnings to pay for qualified expenses as established in the cafeteria plan, most commonly for medical expenses but often for dependent care or other expenses such as orthodontic treatment.
HSAs are tax-advantaged medical savings accounts available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP), and the funds contributed to an account are not subject to federal income tax at the time of deposit
FSA VS HSA: What is required to participate?
To participate in an FSA you must have a job with an employer who offers an FSA. The Account is linked to your Job. To participate in an HSA, you must have a qualified High Deductible Heath Plan (HDHP). If you have a traditional health insurance policy you are probably not eligible for an HSA. Here is a link to find out more information about HSAs.
FSA vs HSA: Who Owns the Account?
A FSA is owned by your employer where as a HSA is owned by the employee.
FSA funds may have some annual role over but typically you have to spend them in the year that you accrue them. With a FSA, you may withdraw up to your entire yearly contribution as soon as you’ve made the first contribution of the year. So its important to setup you contribution levels at the beginning of the year. Keep in mind that if you change jobs you will need to pay those funds back to your employer.
You may only withdraw HSA funds that are actually in the account. However with an HSA you are able to contribute more money to the account per year and the money may come from sources other than the employer and employee. So careful consideration is in order before selecting a particular plan. A discussion with your employer, plan provider, and orthodontist is important to ensure a complete understanding of how the account may be applied to your orthodontic treatment.
HSA is more restrictive than FSA
The following is taken from the 2014 IRS Publication:502
You can include in medical expenses the amounts you pay for the prevention and alleviation of dental disease. Preventive treatment includes the services of a dental hygienist or dentist for such procedures as teeth cleaning, the application of sealants, and fluoride treatments to prevent tooth decay. Treatment to alleviate dental disease include services of a dentist for procedures such as X-rays, fillings, braces, extractions, dentures, and other dental ailments. IRS PUB: 502
What this means is that if braces will prevent Gum Disease then you are able to use the HSA money for the procedure. However, you cannot include the medical expenses that you pay for unnecessary cosmetic surgery. This includes any procedure that is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease. Check with your HSA provider for exact language regarding qualifying orthodontic treatment.
Talk with one of our treatment coordinators today to see if we can help you plan for your perfect smile. Call or Schedule OnLine Appointment