November 13, 2017 – St. Louis
Millions of Americans are being invited by their employers to fund their Flexible Spending Accounts (FSAs) for 2018 during this fall’s open enrollment season.
FSAs are a tax-saving way to set aside funds to pay for qualified out-of-pocket healthcare services and items. These can include charges that are not covered by insurance, such as deductibles, doctor co-payments, prescription drugs, vision care, medical supplies, and dental care, including orthodontic treatment. Funds in FSA accounts are not taxed.
How FSAs Work
If your employer offers the option of participating in an FSA, you are able to decide whether to participate, and at what level. You determine how much per year to contribute to your FSA, up to the maximum amount allowed ($2,650 for 2018). To calculate what to set aside, take into account any recurring qualified expenses such as doctor visit co-pays, prescription drug co-pays, etc. and add up how much per year you spend on these. Add in any expected expenses.
Then, during your employer’s open enrollment period, authorize your employer to withhold a pro-rated amount of money from each paycheck, and deposit the funds in your FSA. The funds that go into your FSA account are not taxed.
All of your FSA funds are available on the first day of the plan year, even though your contributions will be deducted from your paycheck throughout the year. Funds must be used by the end of the plan year (usually December 31). However, the IRS allows employers to provide for a grace period of up to 2 ½ months after the end of the plan year, or to roll over up to $500 of unused funds.
FSA funds can be used to pay for orthodontic treatment for children, teens and adults under IRS rules. Many AAO orthodontists work with patients/patients’ parents to help them maximize their FSA benefit while minimizing their out-of-pocket expenses.
Most AAO orthodontists offer a variety of payment plans to make treatment affordable. In addition, many employers offer dental insurance that includes orthodontic benefits, covering a portion of the fee for care. “Orthodontists are accustomed to working with families that often are juggling other expenses,” says Nahid Maleki, DDS, MS, an orthodontist in Washington, D.C. and president of the AAO. “By using a well-planned tax-advantaged FSA, combined with payment options offered by the orthodontist, plus other available benefits, orthodontic care is within the means of most families. The benefits of orthodontic treatment are lifelong, and can be one of the best investments families can make in their health and well-being,” concludes Dr. Maleki.
An important bill now working its way through Congress could enhance FSA benefits. Visit the AAO’s website to learn about proposed modifications to FSAs, and the names of members of Congress who are supporting this proposed legislation.