Making the decision to get braces is a big step for your oral health and self-confidence. But before you get your appliance put on, you need to know how you are going to pay for treatment.
Braces aren’t cheap, even when you choose the most basic model and need just a few months of care. On the low end, they cost $3,000, and on the high end, upwards of $10,000. Then there are the additional costs to factor in, such as diagnostic images, additional appliances, and aftercare retainers.
For most people, this is more expensive than what they can pay for out of pocket. Flexible Spending Accounts (FSAs) are meant to help people reduce the burden of out-of-pocket medical expenses with or without insurance. They hold funds you and your employer contribute and you apply them to eligible treatments and products. Here is what you need to know about using your FSA to pay for braces.
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FSAs at a Glance
FSAs are medical savings accounts you obtain through your employer. You contribute funds, and in most cases, your employer does as well. This money is not taxed, allowing you to reduce what you owe the IRS each year without losing money.
Whenever you need to pay for medical treatment or purchase qualifying medications and products, you can use your FSA funds to cover the cost. The biggest downside of having an FSA is that you have to use the funds before the end of the calendar year or lose access to them. The only exception is if your employer allows for a small rollover ($550 or less).
FSAs vs. HSAs: How Are They Different?
Overall, FSAs and HSAs are pretty similar: you accumulate tax-free money that you can apply to out-of-pocket medical expenses. However, they differ in ways that impact how you use them. Here’s a quick rundown of what you should know.
|How to Qualify||Obtain an account through your employer.||Take out a high-deductible health plan.|
|2021 Contribution Limit||$2,750||$3,600|
|Contribution Adjustments||Only during special or open enrollment periods.||Anytime|
|Expiration||December 31st of each year.||Funds roll over year after year unless you become HSA ineligible.|
|Account Ownership||The employer||The insured individual|
|Using Funds||Mostly restricted to medical expenses.||Can be used for medical expenses or, for a 20% penalty, withdrawn.|
|Limits on Spending||You can use your FSA based on what you are expected to contribute by the end of the year.||You can only spend what had been contributed but can later file for reimbursement.|
Do FSAs Cover Dental Work?
The IRS determines which expenses are covered by FSA funds. Their guidelines state that FSA funds can be used to cover dental procedures if they either treat or prevent dental disease or related health concerns. However, they cannot be used to cover cosmetic treatments.
Covered Dental Procedures
- Braces and aligners (in most cases)
- Sealants and bonding
- Fluoride treatments
- Dental cleanings
- X-rays and scans
- Root canals
FSAs and Braces: Is It Covered?
When looking at FSA coverage, braces and other orthodontic treatments are in a gray area. You can get braces because it is medically necessary. You can also get them for purely cosmetic reasons. For most patients, it’s a mix of both.
Let’s contextualize this. An overbite is an orthodontic condition that can cause pain, uneven wear on the teeth, and even jaw pain. Most people are also unhappy with how they look when they have an overbite. Correcting it is both medical, since it corrects issues related to health, and cosmetic, since it improves appearance.
Then there is improper spacing. When there are small gaps or mild crowding, the individual typically doesn’t experience health consequences. However, they still might want to correct this to achieve a more conventionally attractive smile. This means braces would be purely for cosmetic treatment.
The line between essential and cosmetic orthodontic treatment is thin. To determine what yours is, speak with your orthodontist or dentist.
How to Use Your FSA Funds
The specifics of how you pay for medical expenses with your FSA will depend on your administrator. Each has its own platforms and methods. Most will offer the following options:
- Debit Card: Most FSA administrators issue debit cards tied to the account. These cards only work when used at terminals registered to approved medical merchants.
- Online Bill Pay: As with a traditional bank account, you will likely have an online banking platform tied to your FSA. You can use this to transfer money to your medical provider’s account.
- Reimbursement: With this method, you pay out of pocket at first, then submit evidence of payment and request reimbursement.
Chances are your dentist or orthodontist will be happy for you to use any FSA payment method for your braces. Just verify with them which ones work best.
What If I Have Dental Insurance, Too?
Having dental coverage is not a barrier to using your FSA to pay for your braces. You just need to make sure you don’t double bill.
For example, if your braces cost $3,500 and your insurance company covers all $3,500, you cannot then take out FSA funds. However, if your insurance covers $3,00, you can use $500 of your FSA money to cover the rest.
Another thing to keep in mind is that dental insurance doesn’t always cover braces. Some providers exclude orthodontics from their dental coverage, while others only cover braces when used on children and teens. Verify coverage limits with your provider before you sign on for treatment.
Frequently Asked Questions
Who determines if my alignment concerns are medical or cosmetic?
Your doctor will, and they can provide the documentation needed to apply your FSA funds to your treatment. Just be sure to verify everything with your FSA administrator before starting treatment.
Is it hard to access FSA funds for braces?
The hardest part is verifying if braces are covered. Payment is simple. The most difficult method is getting reimbursed, but this only requires submitting proof of payment in most cases.
Are there limits on how much of my FSA funds I can put towards my braces?
No, there is no limit. In fact, not only can you apply all the funds currently in your account to braces, but you can apply the funds you will put in your FSA between now and the end of December as well.
If I pay out of pocket, how do I get my FSA to reimburse me?
Typically, you just upload proof of payment to the online platform then use your online banking to transfer funds from your FSA to your primary bank account. Some administrators also allow you to file for reimbursement by fax or mail.
What happens to my FSA if I change jobs?
This depends on if you changed positions at the same company or if you are working for an entirely new employer. If you are still with the same company, you will likely still have access to your FSA. If you are with a new employer, you will no longer have access to the funds in your FSA.
What are the consequences of using FSA funds to pay for ineligible expenses?
The IRS does not fine you for using FSA money for non-approved expenses, but they do levy taxes on whatever you spend outside of approved purchases and treatments. More concerning for most is the fine your employer will give you.
How do I know if I can get an FSA?
Speak with your employer. Chances are it was part of your benefits when you signed your contract, but it is possible that your employer has since added this option.
Can I use my FSA money to pay for my spouse’s braces?
Yes. In fact, you can use your FSA funds to cover any eligible treatment or product for both your spouse and dependents.