HSAs and FSAs are designed to let employees save money for certain health care costs. These costs are referred to as “qualified expenses” and they include coinsurance, copayments and prescription costs. Most FSA and HSA accounts give people a debit card that they can use to pay for expenses throughout the tax year.
Ask your Human Resources department about the rules for contributions and open enrollment. Most corporations make open enrollment the end of the year. HSAs and FSAs have different tax benefits. It is important to know the rules for each account so that you maximize your tax savings and get the medical care you need.
FSAs are available to anyone, including people who are self-employed. A person may contribute each year; contributions and distributions are exempt from federal income tax and employment taxes. FSA funds can be used by an account holder, his spouse and his dependents.
Most FSAs are “use it or lose it” plans that require you to use the funds by December 31 of the tax year or else lose the funds. If you have an FSA, you should plan ahead to ensure you don’t lose the opportunity to use the money for qualified medical expenses.
HSAs are available to people who have high deductible health plans (HDHPs). To be eligible for an HSA, the HDHP must be your only health insurance plan, you cannot be claimed as a dependent on another person’s tax return, and you must not be eligible for Medicare. Unlike FSAs, unused HSA balances roll over into the next year. You can make contributions to the HSA for the last tax year until April 15 of that tax year. An HDHP can be combined with your HSA, which lets you pay for medical expenses without paying federal taxes.
Most HSAs qualify orthodontic therapy which would include treatment with braces, Invisalign, and/ or active retainers to straighten teeth and correct the occlusion.
Since HSAs have a limit on how much money you can deposit each year, if you think you or your child may need braces, schedule a complimentary consultation with Dr. Bui so our team can help you maximize your benefits.