The prices of clear aligner treatment might have you clutching at your wallet and reassessing your spending. But before you go reorganizing your entire budget, consider using your HSA funds, if you have them. These pre-tax funds can be a reserve of payments for your dental and orthodontic expenses, easing the potential stress of a high price tag.
Candid clear aligners are often a qualifying expense under HSA policies, which can provide a lot of help in covering your costs. Read on to find everything you need to know about paying for Candid with HSA funds.
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What Is a Health Savings Account (HSA)?
HSAs are accounts that hold pre-tax income until you apply it towards qualifying health expenses. HSA deposits can be a pre-set payroll deduction or you can add funds whenever you’d like.
To open an HSA, you must be enrolled in a high-deductible health plan. The IRS determines what defines “high-deductible,” and those limits can change every year. As of January 1st, 2023, this means a plan with a deductible of at least $1,500 for an individual or $3,000 for a family.
The IRS also sets the parameters for qualifying treatments and products, but they do so loosely. A wide scope of treatments are eligible, but it’s up to the HSA account administrator to interpret the guidelines. Always check with them before using your funds to avoid fees.
HSAs give you the option to withdraw money from your account to use as you’d like. This comes with a 20% penalty, though, so it isn’t often the best choice, but you might find it beneficial in limited circumstances.
The big limit on HSAs is the yearly contribution. As of January 1st, 2023, you can contribute $3,850 if you are the only insured person on your plan and up to $7,750 if you insure your whole family.
That might be more than you anticipate spending on healthcare, but HSA funds don’t expire, rolling over year after year. This lets you build your savings to prepare for the unexpected. And once your HSA reaches a certain amount, you can invest the money in mutual funds and other options as defined by your account’s policy.
How To Get an HSA
The most common way to get an HSA is through an employer. In many cases, when companies offer a high-deductible health plan, they also offer HSAs. You just enroll in both when signing or during the open enrollment period, which usually takes place in the fall. A Human Resources representative will probably walk you through the process.
You can also open an HSA on your own. You just need to have a health plan with a deductible at or above the threshold set by the IRS. Banks, credit unions, brokers, and insurance companies can all offer HSAs. Contact the one of your choice to see what options are available.
Can I Use My HSA for Candid Clear Aligners?
In most cases, yes. HSAs allow you to use funds for medically necessary treatments, and clear aligners usually benefit your overall oral health — especially in-office and hybrid options, like Candid. On rare occasions, administrators might consider minor orthodontic corrections cosmetic, but most of the time, clear aligner treatment is an eligible expense, so you should be able to use HSA funds to pay for Candid.
If you are uncertain where your personal case falls, discuss it with your dentist and get clarification from your HSA provider.
Do HSA Funds Cover Other Dental/Orthodontic Treatments?
You can use your HSA funds to cover most treatments and even some products if they improve your oral or overall health. So you can pay for preventive, basic, and major oral care using HSA funds without incurring a penalty. This means your twice-yearly dental visit is a qualifying expense, as are fillings, root canals, and gum disease treatment.
But you can’t use an HSA for all dental and orthodontic care. General health products are excluded — think toothbrushes and non-prescription toothpaste. You also cannot use the funds for cosmetic treatments unless you are ready to pay the penalty.
What Types of Treatment Can an HSA Cover?
Anything that is deemed a cosmetic procedure typically won’t be covered by your HSA. However, in many cases, the line between essential treatment and cosmetic procedures is thin. If you are concerned that your treatment might not be covered, speak with your dentist or orthodontist and contact your HSA administrator.
Commonly Covered Dental Procedures
- Dental cleanings
- X-rays and scans
- Root canals
- Fluoride treatments
- Braces and clear aligners (in some cases)
- Sealants and bonding
This isn’t an exhaustive list, but it includes many of the procedures that people typically use their HSA funds to cover. Most of the time, braces and clear aligners are necessary for improving your oral health, so they’re eligible for HSA payments. Some treatments are purely for cosmetic purposes, but you can still often use HSA funds for them.
That said, every HSA administrator interprets things differently, so check with them before beginning treatment to make sure you can use your HSA.
How To Use HSA Funds for Candid Treatment
If you have a card linked to your HSA account, you can use it like you would any normal credit or debit card. Some HSAs will issue checks, which you can use just like any other check. Other HSAs will let you pay bills directly from your online account as long as you use your card or check for a qualifying expense. Otherwise, you’ll incur a 20% penalty and have to pay income tax on the amount.
Or, you can use another form of payment and then reimburse yourself by writing yourself a check or transferring funds from your HSA into a personal account. Just make sure that the expenses came after you established your HSA.
What If I Have Dental Insurance, Too?
Even though they’re often offered together, a dental insurance plan is not the same as an HSA. Dental insurance coverage doesn’t come out of your pocket, while an HSA consists of money you deposited.
If your dental plan has orthodontic benefits, insurance might cover Candid treatment. However, most orthodontic benefits have limits. Some have age limits, some have lifetime spending limits, and many will only cover up to 50% of the treatment cost.
Plus, if you have an HSA, that means you also have a high-deductible health plan, so you’ll need to pay out of pocket until you meet your deductible, which could take a while.
All that to say: dental insurance probably won’t take care of your entire Candid treatment. And you can cover the rest with an HSA if you’d like. If you have both, it’s a good idea to use both, unless you’re saving your HSA funds for medical or dental expenses you’re expecting down the road.
Health Savings Accounts vs. Flexible Spending Accounts
HSA, FSA — it can feel like alphabet soup. And if you are confused, there’s a good reason: these accounts are very similar. Both accounts hold pre-tax income, and both allow those funds to be applied to qualifying healthcare expenses. But there are some key differences to know.
|Who qualifies||Only people with a qualifying high deductible health plan (HDHP)||Anyone whose employer offers them as a benefit|
|2023 contribution limit||$3,850 for an individual, $7,750 for a family||$3,050 for an individual|
|Contribution adjustments||Anytime||Only during open or special enrollment periods|
|Expiration||None, unused funds will roll over||Dec. 31 every year|
|Account ownership||Owned by the individual and follows you during employment changes.||Owned by the employer. You lose it if you change jobs.|
|Using funds||Can withdraw funds for non-medical expenses, but must pay a 20% penalty||Might not have access to funds for non-medical expenses|
Just like HSAs, you can usually use FSA funds to pay for Candid treatment. However, it depends on the details of your specific account and how your administrator interprets qualifying expenses.
If you’re worried about the costs of Candid treatment, there are a few different ways to make it more manageable, including using your HSA funds. Check on your account’s qualifying expenses before diving in, and consult your employer or HSA administrator for further info. By taking advantage of your pre-tax dollars, you can commit to at-home aligner treatment without undue stress about the cost.
Frequently Asked Questions
Are HSAs voluntary?
Sometimes your company’s HR team will open your account at the same time they enroll you in your health plan. However, contributing funds to the account is fully your choice.
Do employers contribute money to HSAs?
Not always, but many employers will add funds to employee HSA accounts. If yours does, you can grow your healthcare savings without needing to contribute any of your actual wages. If you opt to add funds, make sure that you don’t exceed the yearly limit between your contributions and those of your company.
What are the biggest differences between HSAs and FSAs?
The main differences are in who owns the account and what happens to the funds at the end of the year. While HSAs belong to enrollees, FSAs belong to employers — if you leave the company, you lose access. FSA funds also expire at the end of each year, while HSA funds roll over.
If I have both an FSA and an HSA, which should I use?
First, don’t start with your own money; begin with insurance benefits. Once you exhaust your benefits, assuming you have orthodontic coverage, move on to your FSA so you can use the money before it expires. Then, if you have remaining out-of-pocket costs, switch to your HSA. Just take care not to double-bill between the three.
If I change jobs, do I lose my HSA funds?
No, this is one of the big benefits of an HSA over an FSA: the account is yours, wherever you go. The only reason you could lose your HSA is if you change health plans to one with a deductible below the qualification threshold.
How do HSA administrators determine if something is cosmetic or not?
They start with the IRS guidelines and then interpret them as they see fit. Because there isn’t much in the way of hard and fast rules, you can’t really know what to expect, especially with orthodontics. It’s best to always get clarification first.
Are HSA funds easy to use?
Yes, especially when you have a debit card tied to your account; you just use it like any other card. However, all payment methods are pretty easy. Reimbursement is the most difficult but still should only take a few steps to complete.
What happens if I use my funds for a non-qualifying expense?
First, you have to pay taxes on the amount spent. Then, you will pay a 20% fee on top of that.