At this time of year, many families are enrolling in a health insurance plan, or adjusting their existing one, as well as planning out their flex spending accounts (FSA) for 2019. Here at Coppe + Sears, we often have patients and parents ask us if our dental and orthodontic treatments are eligible for reimbursement through their FSA. We will explore what an FSA is, how to plan contributions for the upcoming year, and what an FSA can be used for below.
What is a flexible spending account?
A Flexible Spending Account is as an employer-sponsored benefit that allows employees to pay for eligible medical expenses on a pre-tax basis. A predetermined amount of money is placed into this account to pay for certain out-of-pocket health care costs not covered by an employee’s health insurance.
An FSA saves money by reducing income taxes. Contributions made to a Flexible Spending Account are deducted from an employee’s pay in regular increments before any federal, state, or Social Security taxes are calculated, nor are they reported to the IRS. This allows employees to decrease their taxable income and increase their spendable income.
Flexible spending accounts are generally pre-funded, in order to make the full contribution available to spend at the beginning of the year. If an employee leaves their company mid-year, they may be subject to paying back spent funds that have not been covered by paycheck deductions yet.
The biggest caveat for an FSA is that it operates on a “use it or lose it” principle, meaning any amount that has not been spent by the end of the year is lost. This differs from a health savings account, or HSA, which can have money added it to it indefinitely. However, the rules for this are fairly flexible. For instance, some employers will allow employees to carry over a capped amount in unused funds, while others may offer a grace period of 1-2 months in the coming year. It is important to calculate the right amount to set aside every year so there is no unused money in the FSA in December.
Planning FSA contributions for the upcoming year
In 2019, employees will be able to contribute $2,700 to their flex spending accounts, up from the 2018 limit of $2,650. In choosing an FSA amount, families may find it helpful to refer to these two simple rules of thumb:
For those who have reasonably straightforward medical expenses, there are two easy rules of thumb for choosing an FSA amount:
- If individual out-of-pocket medical bills traditionally amounts to $225 per month or more — roughly $2,700 annually — contributing the maximum amount is wise.
- If medical expenses are generally low, it may be worth contributing only the total amount of approximate copays, as well as dental and vision expenses for the next year.
Medical costs can be hard to predict, but some of the things to consider when planning for the upcoming year’s contributions include:
- Primary care visits
- Specialist office visits
- Any planned surgeries
- Medical devices
- Routine vision services
- Glasses or contact lenses
Any planned dental or orthodontic care should also be considered, including cleanings, dentures, crowns, fillings, plus braces and clear aligner therapy.
Many flexible spending accounts will provide a debit card to pay for expenses, but receipts should always be saved in a safe place in case a charge is rejected and they are needed to prove that expense.
What expenses does an FSA cover?
In general, any expense that is considered to be a deductible medical expense by the IRS (and not reimbursed through insurance) can be reimbursed through a flexible spending account.
Some examples of this include:
- Medical, dental, surgical, chiropractic, psychiatric, and psychological visits
- Contact lenses and eyeglasses
- Qualified long-term care services and insurance premiums, associated nursing services, lab fees, and prescription medications
- Non-elective cosmetic surgery
- Eye surgery or Lasik
- Co-payments on covered expenses
- Orthodontic treatment, including braces and clear aligner therapy
FSA, dental care, and orthodontics
An FSA will typically pay for any medical expenses that help to prevent and alleviate dental disease. Coppe + Sears provide preventive services such as teeth cleaning, the application of sealants, and fluoride treatments to prevent tooth decay. We also offer treatments to alleviate dental disease, including x-rays, fillings, and extractions. For patients needing bite correction or other orthodontic treatment, Dr. Sears has years of experience with braces, clear aligner therapy, and other innovative techniques to straighten the teeth and improve oral health.
Because orthodontic treatment will normally take place over an extended period of time, there are a few things to keep in mind regarding FSA benefits. Orthodontic care differs from other dental procedures that require the actual service to be performed and paid for within the benefit period. Some patients will choose to pay for their orthodontic treatment in full, while others will make regular monthly payments. An FSA should allow reimbursement for prepaid orthodontic expenses up to the chosen amount as long as the payment was made during the benefit period.
Coppe + Sears are here to help you plan for the future of your smile
At Coppe + Sears, we are dedicated to providing individualized dental and orthodontic treatment for patients of all ages in Lexington and the surrounding communities. We encourage potential patients to schedule an initial consultation with us so that our team can assess the complexity and cost of any treatment needed. Our team is here to help every patient figure out the best way to achieve excellent dental health and an incredible smile, whether that is with an FSA, dental insurance, or a payment plan. For more information on our services and payment options, please call our Lexington office at 781.861.6120.