Will My HSA/FSA Cover Orthodontic Treatment?

Choosing to correct your tooth alignment is a big decision, one that can have a major impact on your oral health and self-confidence. It can also significantly affect your finances.

Orthodontic treatment ranges from the affordable to the rather expensive — but even on the low end, it’s more than mere pocket change. With costs ranging from $1,000–$2,000 for at-home aligners to $10,000 for some specialty braces, you might need to get creative with how you pay.

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) can help cover out-of-pocket medical, vision, and dental expenses — with certain limitations. But can you use your HSA or FSA to pay for orthodontic treatment?

Key Takeaways

• FSAs let you set aside pre-tax money for health expenses, while HSAs credit money from your insurance premiums and give you the option to contribute pre-tax funds — but both have limits on what’s covered.
• Orthodontic treatments typically qualify as eligible for HSA and FSA payments — as long as the administrator considers them essential, not cosmetic.
• You can use your HSA or FSA on orthodontics even if you’ve already received insurance coverage.
• You can pay with your HSA/FSA debit card, pay directly from your online bank account, or file for reimbursement later.

What Are HSAs and FSAs?

HSAs and FSAs are tax-advantaged accounts strictly used to save and pay for qualified medical expenses. Depending on the type of account and the terms set by the administrator, you can use these funds on deductibles, copayments, coinsurance, treatments, prescriptions, and even certain over-the-counter health-related products.

These accounts function similarly to traditional bank accounts. Most are tied to a debit card and allow you to request checks. Typically, you will have access to an online banking platform. What makes them different is that the funds you can add per year are tightly limited and you can only use your debit card and checks to pay approved medical merchants.

HSAs at a Glance

HSAs are accounts made available to people who have a high-deductible health plan. Each year, the government sets the minimum threshold for what can be considered a high deductible; as of January 1st, 2023, that’s $1,500 for an individual and $3,000 for a family.

In addition to having a high-deductible health plan, you also must meet the following requirements to have an HSA:

• Have only one insurance plan
• Not be eligible for Medicare or Medicaid
• Not be listed as a dependent on anyone’s tax returns
• Be under the age of 65

You can open an HSA on your own or get one through an employer, and your funds roll over from year to year. The government limits how much money you can contribute each year, and the amount changes annually. For 2023, it is $3,850 for an individual and $7,750 for a family.

HSAs are tax-advantaged, but how that looks depends on if you open the account on your own or receive it through an employer. If you open it on your own, you can deduct the contributions from your taxes. If it is through your employer, a portion of your pre-tax salary or wage goes into the account.

FSAs at a Glance

FSAs are accounts that employers can include as part of their benefits package, so you can’t open one on your own, and they are tied to the employer. Only $615 of the funds you add to an FSA will roll over from year to year, so you have to use it or lose it.

The IRS sets the threshold for maximum FSA contributions per year, and for 2023, that is $3,050. The money is pre-tax, meaning it is taken out of your paycheck before taxes are levied. In the vast majority of cases, these accounts are prefunded, meaning the full amount of your expected contribution for the year is available right from the start.

Do HSAs and FSAs Cover Dental Treatment?

Both HSAs and FSAs have limits on the treatments they’ll cover. Basically, essential medical care is typically covered while cosmetic treatments aren’t. This means that anything that either treats or prevents dental disease or related health concerns is almost always a qualifying expense, while cosmetic dentistry, like teeth whitening, isn’t.

What About Orthodontics?

The line between essential and cosmetic treatment can be pretty thin in any medical field, but this is especially true with orthodontics. The good news: many dentists and orthodontists consider braces and clear aligners a medical necessity, correcting problems that cause pain, tooth decay, gum disease, and more.

In fact, the IRS—who decides what’s eligible for HSA and FSA payments—lists braces as an example of eligible dental treatments. That’s why you can typically pay for them with an HSA or FSA.

There may be times when orthodontia is considered cosmetic and, therefore, ineligible for HSA or FSA payments, but these instances are pretty rare. Still, you should check with your dentist and account administrator to be absolutely sure before you begin treatment.

Dental Procedures Typically Covered by HSAs and FSAs

• Braces and aligners (in most cases)
• Dentures
• Sealants and bonding
• Fluoride treatments
• Dental cleanings
• X-rays and scans
• Fillings
• Root canals
• Extractions
• Crowns
• Bridgework
• Gum surgery

HSA and FSA Braces Coverage

Out of the most common appliances for correcting tooth alignment, braces are the most commonly covered. This is because they are well-established appliances known to correct even severe orthodontic abnormalities. While there can still be limits, HSA and FSA administrators are more likely to default to considering treatment with braces as essential over cosmetic.

HSA and FSA Invisalign Coverage

When Invisalign first debuted, it was met with some skepticism, and many considered it a purely cosmetic treatment. Now, this is rarely the case. Thanks to advancements in design and attachments, Invisalign aligners can make a range of complex shifts, even correcting problems with the jaw. HSAs and FSAs are pretty open to Invisalign coverage but might still be hesitant in some cases.

HSA and FSA At-Home Aligners Coverage

Online aligners, like Byte and SmileDirectClub, are among the newest forms of orthodontic treatment. However, many of them can only treat mild-to-moderate spacing concerns, which puts them closer to the cosmetic side of treatment.

So, does that make them ineligible for HSA and FSA funds? Not necessarily. In fact, they qualify fairly often. Every administrator interprets essential vs. cosmetic in different ways. Verify with yours whether mail-order aligners are a qualifying expense.

How to Apply HSA and FSA Funds to Orthodontic Treatment

If your orthodontic treatment qualifies, you can apply your HSA or FSA funds to your treatment. But if you’ve never utilized these funds before, you might be unsure how to do it. Here’s what you need to know.

Using HSA Funds for Orthodontics

Applying HSA funds to orthodontic care is pretty simple; you just use the money like you would with any other bank account. If you have enough money in your HSA account to pay for your orthodontic treatment in full, you might get a small discount from your provider. If not, you will need to set up a payment plan.

The financing details depend on what you can afford and what your orthodontist offers. Usually, it will include a down payment plus monthly installments spread out over 24–36 months. You can use your HSA to cover all of this — just make sure you always have enough in your account to cover the monthly drafts without contributing more than the yearly limit.

Keep in mind that with an HSA, you can reimburse yourself for whatever you paid out of pocket — even years down the road. So, if your HSA funds are only enough for half of your treatment this year, you could reimburse yourself for the other half next year.

Using FSA Funds for Orthodontics

Using FSA funds is also similar to using a normal bank account. Because they have limits and don’t roll over, you probably won’t have enough in your account to pay for treatment in full unless you choose mail-order aligners. This means, in most cases, you will need to work out a payment plan with your dentist or orthodontist.

FSAs have special rules for applying funds to orthodontic treatment. Specifically, you can apply funds to orthodontic payments even if you received your appliance the year prior. With other dental treatments, you can only use your FSA money for treatments rendered that year. However, you cannot reimburse yourself for orthodontic treatment years later, just in the following year.

Using HSA and FSA Funds for Related Expenses

The cost of orthodontic care isn’t limited to the appliances alone. You also will need at least some of the following:

• Initial exam
• Photographs
• Impressions
• 3D scans
• X-rays
• Extractions
• Adjustments
• Retainers

Both HSAs and FSAs usually cover most of these related expenses — even if your provider considers the treatment cosmetic — because most of them are diagnostics.

How to Pay Using HSA or FSA Funds

Each administrator sets up their own methods for accessing your HSA or FSA funds, which means you need to know your options. Most will offer some combination of the following:

• Debit Card: Most HSAs and FSAs will have a debit card attached to the account. You use it like you would a normal debit card — the only difference is that it won’t work at terminals for non-medical merchants.
• Checks: This option is becoming less common, and most HSA and FSA managers no longer send them out to account holders by default. However, you can usually request them and then use them as you would checks for a traditional bank account.
• Online Bill Pay: This is becoming the most popular way to use HSA and FSA funds. You use your online banking portal to send money to your healthcare provider or medical merchant, as well as reimburse yourself by transferring funds to your primary bank account.
• Reimbursement: Sometimes, you need to pay out-of-pocket first before using your HSA or FSA funds. When this happens, you can reimburse yourself. You can do this on your own through your online banking portal or file for reimbursement by fax or mail.

Combining HSA and FSA Funds With Other Payment Methods

For many, using your HSA and FSA funds alone won’t be enough to fully cover the cost of orthodontic treatment. In some cases, they can lower the costs enough that getting braces or aligners is accessible. In other cases, your dream smile may still be out of reach.

First, know that if you have an HSA and an FSA, you can use both — you just need to be careful. Don’t double bill the accounts, and make sure your FSA is limited specifically to things like dental and vision expenses.

Second, don’t assume that your only option is to cover the remaining costs out of pocket or upfront. There are other solutions that can help make the cost of treatment better work for you.

Dental Insurance

If you have dental insurance, it might come with orthodontic benefits. In most cases, these policies will cover orthodontic treatment in part — typically 25–50 percent of the cost. However, some policies change their coverage for adult patients. Be sure you understand the exact terms of your policy and make certain you do not double bill between your insurance policy and your HSA or FSA.

Financing and Payment Plans

Most dental and orthodontic offices will help connect patients with financing options and/or offer in-house payment plans. With both options, there is typically a down payment and then monthly installments, but the specifics will vary. This can help break up the out-of-pocket costs over time and might even make it easier to add to your accounts, then use the funds to cover treatment.

Personal Loans

Personal loans come from banks and credit unions. While the provider can set limits on how you use the money, most are open to applying loan funds to medical treatments. This method gives you quick access to the full cost of treatment, allowing you to pay in advance and potentially receive discounts. Then, you pay back a little on the loan each month until you pay it off.

Just be careful, because these loans can have high interest rates, so you could end up paying a lot more in the long run.

Discounts

In some cases, you might be able to take advantage of discounts and deals to lower the cost of treatment. Sometimes, dentists and orthodontists will run specials, and there are always sites like Groupon.

However, the treatments most likely to feature discounts are at-home aligners. Companies like SmileDirectClub and Byte will often have discounts on their website to help you reduce the overall cost of treatment.

Final Thoughts

Orthodontic treatment can be a confidence booster as well as improve your oral and overall health. In most cases, you can use your HSA or FSA funds to reduce the financial burden associated with braces and aligners. With this and other payment methods, you should be able to make orthodontic treatment accessible. To learn more about the specifics, talk to your HSA or FSA administrator.