Paying for Orthodontic Care with Pre-Tax Dollars

Photo by Diana Polekhina on Unsplash


Most dental insurance policies do not pay for modern orthodontic treatment in full. While every bit helps, it usually covers only part of the overall expense, leaving the orthodontic patient or patient’s family to pay the rest out-of-pocket. However, there are ways that you can reduce the cost of treatment by paying with tax-free dollars using your Health Savings Account (HSA) or Flexible Spending Account (FSA).


What Are HSAs and FSAs?


These accounts are designed to allow people to put pre-tax income into them to pay for predetermined eligible expenses. Pre-tax income means that you can deduct the amount that you put into the account from your gross earnings on your taxes every year. That means that every dollar you put into these accounts reduces your overall tax burden for that tax year, saving you money. 


While these accounts share this characteristic, they are different types of accounts. The most significant difference, per Value Penguin (by Lending Tree), is that you control the HSA, and your employer controls FSAs. FSAs are also less flexible than HSAs. 


Another difference is that individuals can only open an HSA if they participate in a high deductible health plan (HDHP), a type of insurance where the individual or family pays 100 percent of their medical expenses until they reach the total deductible amount. An FSA is set up by employers and does not require an HDHP. 


Also, the annual contribution limits for HSAs and FSAs are different. In 2021, individuals can contribute up to $3,600, and families can put in $7,200 pre-tax in an HSA. Individuals can put up to $2,750 in a health FSA. However, you must spend all the health FSA in a calendar year (with a couple of grace-period months) or surrender the funds back to your employer. An HSA rolls over in total every year for the individual to use for a future expense.

There are other differences between the accounts, too. Click here to read Value Penguin’s explanation.


What Can I Pay with the HSA and FSA?


HSAs allow you to pay for predetermined eligible expenses. As the name implies, the HSA allows you to pay for qualifying medical expenses that insurance doesn’t reimburse you for or pay. 


However, dental services fall under this umbrella, too. Co-pays for regular dental visits are covered, as are dentures and dental surgeries. Per the American Association of Orthodontists, you can use it to pay for orthodontic treatment in most cases (contact your HSA provider to double-check you can).


Many HSAs have a debit card connected to the account. That means you can pay with a debit card the same way you would any credit card. It’s a good idea to keep all your receipts when you pay for an eligible expense if the IRS has questions. 


In the case of an FSA, orthodontia is also an eligible expense. However, the FSA will need to be applied first to the balance of the orthodontia bill before you use any HSA funds. Since FSAs do not have a generous rollover amount year-to-year, it’s a good idea to do this anyway to ensure that you spend every dime you put into it rather than giving any unused funds to your employer at the end of the year. You can read the Bank of America explanation and example here for more information on this combined payment strategy.


Dental insurance helps pay for modern orthodontic treatments like braces or clear aligners but doesn’t pick up the whole bill. Bloom Orthodontics has payment options that can work with your budget to help make the remaining out-of-pocket expense more affordable for you. In addition, paying with an HSA or an FSA through your employer can help you save even more money. And more money in your ledger is the perfect thing to inspire you to show off your new smile. 



To schedule your free consultation today, call Bloom Orthodontics office in Long Beach at 562-421-8883.


Bloom Orthodontics in Long Beach has a long history of improving our patients’ smiles. We provide modern orthodontic treatments delivered with old-fashioned excellence in patient experience. Follow us on Facebook and Instagram.




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