Using HSA to Pay for Braces
Can you use your HSA (Health Savings Account) to pay for Braces or Orthodontics? Well, the simple answer is YES. But of course, you need to know a bit more before rushing out to get braces. The vast majority of Health Savings Account providers adhere to the IRS Publication 502 – Medical and Dental Expenses explanation which is broken down in depth a bit lower on this page. The gist of what the IRS says is that braces will be covered under an HSA as long as those braces are used to prevent or alleviate gum disease. Also in many cases, you have to go to a licensed Dentist and not the Orthodontist. The IRS document goes one step further to say that anything “cosmetic” is not eligible. Meaning anything that improves the look.
If you can get your dentist to state that Braces will prevent Gum Disease then that is the easiest and cleanest way to use HSA towards braces. Health Savings Accounts have been incredibly helpful for families who may otherwise have trouble covering medical expenses. Many parents have questions regarding these accounts and the eligibility of orthodontic work. These accounts, also known as HSAs, can cover the expensive costs of orthodontic work. If you are facing unexpected dental costs, an HSA might be the best choice for you.
An HSA is very similar to an FSA (Flexible Spending Account) in that you can bank money tax-free into an account that can be used for a variety of uses. The only difference is HSA money can roll over year after year while FSA money is lost if not used at year end. So a major bonus for HSA account holders. What’s important to us is that you can use an HSA account to pay for most braces. After researching a handful of the largest companies, the bottom line is practically all braces and orthodontic procedures are covered with the exception of cosmetic braces.
A Health Savings Account is available for those who wish to cover the cost of braces and other orthodontia, which are often an unexpected expense. The HSA is comparable to an IRA; the money is withheld from your paycheck. HSAs allow you to pay for health expenses and to save money for future health expenses.
One of the advantages to using an HSA is that the patient owns and has complete control of the money in the account. You may sign up for an HSA through an insurance company, employer or bank.
Using Insurance with your HSA
A Health Savings Account is typically used as an alternative to insurance, but many people go through their insurance companies to obtain HSAs. If your insurance company does not offer an HSA, you may wish to change plans or go through another venue, like your bank. If your insurance is compatible with an HSA, you can request an application and submit it back to the company. One important thing patients must remember is that expenses not covered as part of the health plan will not count toward a deductible. Speak to your insurance provider about orthodontia coverage on your plan.
Medical Expenses are certainly covered as stated by the IRS Publication 502 which states:
Treatment to alleviate dental disease include services of a dentist for procedures such as X-rays, fillings, braces, extractions, dentures, and other dental ailments.
What this means is that if your Orthodontist believes that braces will prevent Gum Disease then you are able to use HSA money for any procedure and claim so on your taxes.
Under the Cosmetic Brace section, the IRS document says:
Generally, you cannot include in medical expenses the amount 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
So really if your teeth and gums are healthy and you are looking to use HSA to simply straighten teeth and give you a better smile, that would not be covered.
Receive a Quote for Braces
Your next step is to ask your orthodontist for a quote, which should include the total cost of treatment as well as how long you are able to make payments. This makes the process of planning contributions to your account simple. While the most affordable braces cost at least $2,000, the total cost of treatment can run up a bill close to $8,000.
Health Savings Accounts have a limit on the amount you can deposit each year. In the case of braces that require a treatment plan lasting longer than one year, you will have several years to deposit money into the account.
Using HSA to Pay Expenses
The best thing about using a Health Savings Account to pay for orthodontic expenses is that you can design it to function around your life. The deductions are made from your paycheck, and you can choose a method of obtaining the money – a debit card or a check at the end of the year. If you are making monthly payments for braces, it is wise to ask for the debit card. You can use this at each checkup to pay your balance.
Some people prefer to pay the bill using their own money and simply request the payout at the end of the year. If this is the option you choose, you must save all receipts to receive reimbursement. You may be asked to show documentation, or pay a hefty penalty.
Health Savings Accounts are great for those who are thinking ahead about paying dental bills. HSAs can help you receive the treatment you need, in spite of unexpected expenses. Setting up an account is simple, and you can easily pay for orthodontic treatment for yourself or a member of your family.
Are Braces Covered by your HSA Provider?
Below is a list of providers, a small explanation of their coverage, and a chunk of copy from the HSA provider’s online resource on the subject of braces and orthodontics.
What you should know about Aetna is they cover only procedures performed by a Dentist when it comes to braces. And of course its the Orthodontist who deals with braces. Luckily some Dentists are skilled with newer technology like Invisalign.
Amounts paid for dental treatments qualify as medical expenses. This includes fees paid to dentists for X-rays, fillings, braces, extractions, dentures, caps, crowns, fluoride treatment, implants, etc.
With the Chase HSA card you can use your spending account on braces but not for cosmetic reasons. This means only if the health of your gums or teeth are at risk. So in essence Chase is just ensured they will not have to pay for expensive problems in the future. A “Good” Orthodontist can probably make a case that braces are vital for the future health of your gums.
Funds in your HSA can be withdrawn tax-free to pay for qualified medical expenses: Orthodontia (not for cosmetic reasons)
Bancorp Bank – HSA Medical Expenses
The Bancorp HSA details on braces are pretty vague. The document below simply states that braces are indeed covered under their list of medical expenses but no other information is offered. The document refers to the ORS list referenced a on this page. So we can assume that again you must have a dentist perform the procedure and he must be able to state that braces are for the treatment or prevention of gum disease.
Eligibility for braces is defined in Section 213(d) of the Internal Revenue Code. A complete list is
available from the IRS in Publication 502 (Medical and Dental Expenses) by visiting www.irs.gov
Wells Fargo – Qualified Medical Expenses
Wells Fargo has a fair amount of detail when it comes to braces. As you can see below, the definition is very broad so finding a dentist or orthodontist that can fit braces into one of these categories is key.
The IRS defines qualified medical expenses as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body including teeth braces.
Tango Health – Dental Expenses
Tango Health has the MOST detailed information when it comes to HSA and paying for braces. They state what is covered and what is not covered under their Health Savings Account plan. You simply can get braces if they prevent or alleviate dental disease. Any sort of braces that improves appearance cannot be paid for with Tango’s HSA plan.
“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.”
“Generally, you cannot include in medical expenses the amount 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. You cannot include in medical expenses amounts paid to whiten teeth.”