If you get your insurance and other benefits through your employer, you might be eligible for a Flexible Spending Account or a Health Savings Account. Both are smart ways to reduce your tax liability by saving pre-tax dollars in an account that is used only for qualified expenses related to health care.

Guess what? Your FSA and HSA dollars CAN be used for orthodontics, because orthodontic treatment is a qualified medical expense under IRS guidelines.

That means that if you use your FSA or HSA benefit to pay for your orthodontic treatment, you’re actually using tax-free money.

Just a reminder about the difference between the FSA and the HSA: Both plans allow you to deposit pre-tax funds, but the FSA has strict deadlines about how much time you have to use the money. Typically, you have to use FSA funds by the end of the calendar year or you forfeit what’s left. Some plans do allow a carryover amount or run on a fiscal year instead of a calendar year, but that’s on a plan-by-plan basis. Check with your plan administrator for more details.

The HSA does not have the same limits on when the funds have to be used. They continue to carry over year after year. However, an HSA can only be used with a high-deductible insurance plan.

In general, the limit for contributions to a flexible spending account in 2021 will be $2,750. The limit for a health savings account will be $3,600 for individuals and $7,200 for those with family plans. Ask your plan administrator about limits, carryover options, and catch-up contributions for your specific plan.

And if you don’t have an FSA or HSA, now is the time to ask your human resources department whether you have the option to start one. Whether you use the funds for orthodontic treatment or not, these accounts are an excellent way to budget healthcare costs and save tax dollars.

As always, if you have any questions about paying for orthodontic treatment, the best way to get specific answers is to schedule a free consultation with Dr. Jones or Dr. DeShon. After we design your treatment plan, we can review costs and payment options.