As an orthodontist, your speciality is enhancing patients’ quality of life through improved smiles. But with that comes the ins and outs of running a business, which can be confusing—especially when it comes to understanding accounting. Many patients will have questions about how to pay for their treatment, and some of them will be interested in using their FSA or HSA to cover their costs. What are the rules regarding FSA funds and orthodontic treatment? Keep reading to find out.
What is an FSA or HSA?
FSA stands for “flexible spending account” and is something some employers offer as a benefit. FSA funds are tax-free and are used to pay for out-of-pocket health costs, like deductibles, copayments, and other medical and dental expenses. The money in an FSA must be spent by the end of the year (or by the end of the employer’s grace period).
HSA stands for “health savings account” and is something people can open on their own if they have a high-deductible health plan (HDHP). HSA funds are also used for eligible medical and dental expenses. Funds can be added at any time and never expire – they roll over every year.
Can FSA and HSA funds be used to pay for braces and Invisalign?
Yes, they can! Braces and Invisalign are considered eligible dental expenses and can be advertised as such by your office.
How do I explain FSA funds and orthodontic treatment to my patients?
Most medical expenses being paid from an FSA or HSA need to be paid at the date of service; the one exception to this is orthodontic treatment. Patients are able to pay for their orthodontic treatment in full before their treatment begins, or they can pay during the treatment using a payment plan. In either case, patients can use FSA or HSA funds to cover part or all of the cost. If a patient has both an FSA and an HSA, advise them to use FSA funds first, since these expire at the end of the year.
Make sure patients understand the documentation needed for both types of accounts. For FSA funds and orthodontic treatment, patients have to submit documentation to their FSA provider so the expense can be approved. This documentation needs to include the patient’s name, first date of treatment, the contracted amount, and the amount the patient paid. For patients paying using a payment plan, they also need to include the end date of treatment and the amount of the monthly payments.
For an HSA, patients don’t need to report to an HSA provider – they just need to hang on to their medical receipts in case of an IRS audit.
For many patients, using an FSA or HSA is a tax-free, cost-effective way to pay for their braces or Invisalign treatment. Using the information outlined in this article, help your patients understand how and when to use an FSA or HSA, then let Greyfinch manage all the different FSA and HSA forms for you.
