While there are many ways to pay for orthodontic braces, many families take advantage of the tax-free benefits of flexible spending accounts (FSA) to help cover the costs. Over 14 million Americans have access to FSAs through their employers. With them, they are able set aside funds in an untaxed account and use the money for non-covered and out-of-pocket medical expenses.

The American Association or Orthodontists (AAO), recently released a statement warning families that plan to use FSA funds that significant cuts to the program may reduce their ability to pay for orthodontic treatment.

Prior to the implementation of the Affordable Care Act (ACA), the Internal Revenue Service (IRS) allowed employees to save up to $5,000 in FSAs. At the beginning of this year, that amount was reduced to $2,500. 

"More than 60 percent of orthodontic patients use FSAs to pay for treatment," said Dr. Gayle Glenn, president of the AAO, in a press release. "Families with children and adults considering orthodontic treatment need to be aware of this change and adjust their financial plans accordingly. For many people, this represents a 50 percent reduction in benefits." 

On a somewhat positive note, the IRS recently issued a new ruling allowing account-holders to roll over up to $500 into the next year. This will take a bit of pressure off FSA's "use it or lose it" policies. 

If you are considering using an FSA to pay for orthodontic treatment, be sure that you know the stipulations of your policy. For more information about payment options for braces, don't hesitate to reach out to a New York City orthodontist today. 

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