So, you’ve researched teeth straightening methods and you’re wondering how you’ll manage the high prices. Good news: if you have a Health Savings Account (HSA), you have pre-tax funds waiting for you to apply them to qualifying medical and dental expenses.
But does SmileDirectClub qualify? These at-home aligners are more affordable than traditional orthodontics, but still not that cheap. An HSA account can help ease some of that financial burden. HSA policies vary, but most allow you to use their funds for online aligner services like SmileDirectClub. How? You’re about to find out. Read on for a thorough rundown of how to pay for SmileDirectClub with an HSA.
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What Is a Health Savings Account?
An HSA is a savings account that is meant to hold pre-tax income that you can spend on qualifying medical and dental expenses. You can make regular deposits into your account (an established payroll deduction) or you can add funds irregularly whenever you’d like. In some cases, your employer will also contribute funds.
Not everyone can have an HSA. To qualify, you have to be enrolled in a high-deductible health plan. The IRS sets the threshold for what is considered a high deductible and has the option to change this each year. As of January 1st, 2023, a high deductible is at least $1,500 for an individual and $3,000 for a family.
The IRS also outlines the parameters for qualifying and non-qualifying treatments and products. These aren’t perfectly defined, so it is up to HSA administrators to interpret these guidelines. Expect a wide scope of treatments to be covered but take time to verify before making a purchase. Non-qualifying purchases are subject to hefty fees.
If you need the funds in your account for something other than a qualifying expense, you can withdraw money. Just keep in mind that this comes with a 20% penalty plus taxes, so it won’t often be the best decision.
Another HSA aspect set by the IRS is the yearly contribution limit. For 2023, that’s $3,850 for an individual and $7,750 for a family. That might be more than you expect to spend out-of-pocket on healthcare in any given year but since your HSA funds roll over each year, it allows you to prepare for the unexpected. Plus, once your balance reaches a certain amount, you can invest the money in mutual funds and other options, depending on your account’s terms.
How to Get an HSA
It’s not your only option, but the most common way to get an HSA is through your employer. When employer-sponsored health plans have high deductibles, it’s standard to also offer HSAs bundled with these plans to help employees better manage their out-of-pocket expenses. You can either open the account when you start your job or during the open enrollment period, which is usually every fall. Ask your HR department to help you with the process.
If your health plan isn’t through your employer or you are either self-employed or between jobs, you can also open an HSA on your own. Just make sure your plan meets the IRS threshold for a high deductible, then speak with a bank, credit union, broker, or your insurance company about opening an account.
Do HSA Funds Cover Dental/Orthodontics?
HSA funds can usually be applied to treatments and products that improve health — though there are exceptions. Preventative, basic, and major dental and orthodontic treatments are usually considered to be qualifying medical expenses, allowing you to use HSA funds to pay for them without incurring a penalty. Your six-month dental visits, fillings, and root canals are all things you can pay for with your HSA.
So, what’s excluded? First, general health products are not qualifying expenses. This includes things like toothbrushes, floss, and non-prescription toothpaste. Second, cosmetic treatments are not HSA eligible, so treatments like teeth whitening do not qualify.
What Types of Orthodontic Treatment Can an HSA Cover?
Here’s the good news: most orthodontic treatments are qualifying expenses. This means braces and in-office aligners like Invisalign can be paid for with HSA funds — usually, at least.
Essentially, orthodontics falls into a gray area when it comes to HSAs. For the vast majority of patients, braces and aligners (like Invisalign and 3M Clarity) are major treatments, making significant changes to tooth positions and improving oral and even general health. But sometimes, they’re used to make smaller changes that are strictly cosmetic in nature. In these cases, treatment isn’t HSA qualified.
Can I Use My HSA for SmileDirectClub Clear Aligners?
Most HSAs will allow you to use funds for SmileDirectClub aligners. But you should still review your account’s list of qualifying expenses — or reach out to your employer/HSA administrator — to confirm. Some HSAs will classify home aligners as cosmetic treatment, which aren’t normally included in HSA-eligible expenses. Most of the time, this isn’t the case, but you should double-check to be sure.
Chances are, you’ll be able to use your HSA for SmileDirectClub treatment. Their website says if you have “a Health Savings Account (HSA) or Flexible Savings Account (FSA), you may be able to use it to pay for your clear aligners” because “Many HSAs and FSAs cover invisible aligners.”
Will SmileDirectClub Help Me Use My HSA?
Yes, they will! If you have a card linked to your HSA, you can simply use it during the checkout process. And if you don’t, SmileDirectClub suggests that you call their SmileExperts at 800-688-0450. They will help you process your order and access your HSA funds.
Sometimes, your HSA might need documentation to release your funds or provide reimbursement, and SmileDirectClub can provide receipts if necessary.
They don’t offer quite as much help with dental insurance processes. They will check to see if you have coverage and provide documents you might need, but you’re on your own after that. If you’re looking for a home aligner company that will take care of all your insurance and HSA procedures for you, check out Byte. Their insurance team knows the process inside and out and will handle any necessary paperwork and communication.
How To Use HSA Funds for SmileDirectClub Treatment
Health savings accounts provide multiple ways to access your funds. The easiest is by getting a card linked to your account. You can use this card just like you would use a regular debit or credit card and it automatically withdraws funds (as long as you use it for qualifying expenses). You can also get HSA-linked checks that operate the same way. Some HSAs will even let you pay bills directly from your online account.
Just make sure that you only use your HSA for qualifying expenses. You can use it to pay for other things, but you’ll incur a 20% penalty and you’ll need to pay income tax on that amount.
You can also reimburse yourself from your HSA. Just use a different form of payment, then write yourself an HSA check or transfer money from your online HSA account into a personal account. You’re only able to do this for expenses that occurred after you established your HSA. So, you can’t reimburse yourself for treatment you had years ago, or you’ll incur the same 20% penalty.
What If I Have Dental Insurance, Too?
HSAs are not a type of dental insurance plan. They use your own money, taken directly from a paycheck, while insurance coverage comes out of the provider’s pocket, not yours.
Because they’re separate entities, it’s possible to use insurance coverage and an HSA to cover the cost of your SmileDirectClub treatment. Insurance plans that include orthodontic benefits sometimes include at-home aligner treatment like SmileDirectClub. In fact, SmileDirectClub has partnerships with UnitedHealthcare, Aetna, Anthem, Empire, MetLife, Capital, National Dominion, and more that makes them eligible for in-network coverage.
But even if you receive insurance coverage, it probably won’t cover the entire cost, and that’s where the HSA comes in. You can use your HSA funds to cover the remaining amount. In the end, you might not even have to pay anything out of your personal, non-HSA funds.
Health Savings Accounts vs. Flexible Spending Accounts (FSAs)
Feeling confused about the differences between HSAs and FSAs? It’s understandable. Not just similar in name, these accounts both hold pre-tax income to be spent on qualifying treatments and products. Still, there are a few big differences to be aware of.
| HSA | FSA | |
|---|---|---|
| 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 |
As with HSAs, FSA funds can usually be applied to SmileDirectClub treatment. Whether or not yours can be will depend on how your account administrator views at-home aligner therapy. Speak with them to better understand your qualifying expenses.
Final Thoughts
Got money sitting in your HSA fund? It can help make your SmileDirectClub treatment costs much more manageable. Check with your employer or HSA administrator to discuss the details of your account. SmileDirectClub is already convenient, but this flexibility can make the process even smoother.
Frequently Asked Questions
Are HSAs voluntary?
You might be automatically given one as part of your benefits package but there is no requirement to use it.
Do employers contribute money to HSAs?
Some employers do though this isn’t universal. If your employer does, you can grow your healthcare savings without contributing any funds. If you choose to add money to the account, be sure not to exceed the yearly contribution limit.
What are the biggest differences between HSAs and FSAs?
There are two big differences. First, FSAs are tied to the employer and you lose them when you switch companies; HSAs are yours and stay with you for as long as you have a high-deductible health plan. Second, FSA funds expire at the end of the year while HSA funds roll over.
If I have both an FSA and an HSA, which should I use?
Don’t start by using your own money; begin with using insurance benefits. Once you use those to their max, switch to FSA funds so you can use the money before it’s gone. After, if you still have remaining expenses, use your HSA money. Just don’t double-bill between options.
If I change jobs, do I lose my HSA funds?
Nope! This is one of the biggest benefits of having an HSA over an FSA: the account belongs to you. The only way to lose it is to change to a health plan with a deductible below the threshold.
How do HSA administrators determine if something is cosmetic or not?
They use the IRS guidelines as their starting point, interpreting them as they see fit. Since there isn’t a comprehensive list of qualifying expenses, you can’t know what they will do for a given treatment unless you ask.
Why are in-office treatments more likely to be considered qualifying medical expenses?
First, they are more likely to be clearly medical in nature. Second, you have a practitioner who can submit paperwork verifying that the treatment is not cosmetic.
Are HSA funds easy to use?
Yes, especially when you use the debit card associated with the account. Other options, like online bill pay and reimbursement, are also fairly simple.
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.
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