This blog is part three of a three-part series on the current state of the dental insurance industry, written by industry thought leader and Whiteboard Marketing Market Advisory Council member, Nick Sanyk of Smile Hilliard.
HSA and FSA Accounts
Many patients wonder if they are able to use a Health Savings Account (HSA) or a Flexible Spending Arrangement (FSA) to
help pay the cost of their dental treatment. Rest assured that the answer to this question is YES! But what exactly are these two payment methods? Both accounts allow you to make tax-free contributions to save for medical costs. However, there are distinct difference to the two plans.
Both HSAs and FSAs allow people with health insurance to set aside money for health care costs referred to as “qualified expenses,” which may include deductibles and copayments towards treatment, health related products and prescriptions.
Sometimes employers will contribute funds to these accounts as well. In most cases, you receive a debit card for your account and can use it to pay for these qualifying expenses throughout the year. You are able to uses this card to make purchases in our office. However, you are also able to submit a payment receipt to your HSA or FSA account for direct reimbursement.
Health Savings Accounts are only available to those who have a High Deductible Health Plan (HDHP), with a deductible of $1,400 or more for an individual or $2,800 or more for a family. To qualify for an HSA, this must be your only health insurance plan, you must not be eligible for Medicare and you cannot be claimed as a dependent on someone else’s tax return.
As of 2022, contributions to an HSA are capped at $3,650 for individuals and $7,300 for families. You can change the contribution amount at any time during the year and unused balances roll over to the following year. Contributions to the account are tax-deductible, but can also be taken out of your pay pre-tax. Growth and distributions are also tax-free.
Flexible Spending Arrangements generally have no eligibility requirements. For 2022, contributions to an FSA are capped at $2,850. Contribution amounts can be adjusted only at open enrollment with your employer’s Human Resources Department or with a change in employment or family status.
With some exceptions, FSAs are “use it or lose it,” and you will forfeit any unused balance at the end of the year. Contributions to the account are pretax, and distributions are untaxed.
Both accounts have benefits that can make managing your out-of-pocket medical expenses easier throughout the year. Things like your flexibility in contributing, the ability to keep your unused balance and additional tax benefits make the HSA the wisest choice if you have the option.
Still, either account stands to save you money and make budgeting for medical costs easier. If you don’t qualify, sign up for the FSA. A good plan is start by contributing enough to cover your deductible, expected medication costs, anticipated doctor’s visits and any planned treatments or surgeries for the year.
CareCredit
CareCredit is a healthcare credit card designed for your health and wellness needs and is a great option for patients who need assistance in financing their care through convenient monthly payments. It is accepted at over 200,000 providers nationwide for Dentistry, LASIK and Vision Care, Cosmetic and Dermatology Procedures, Veterinary, Hearing Care and other specialties.
CareCredit is easy to apply for online and approval decisions are given immediately. Once approved, you will be issued a purchasing card in the mail and may use your account immediately. You can use your CareCredit account over and over (subject to credit approval) for you, your family, and even your pets – without reapplying, as long as you have available credit.
When making a transaction, you may choose from a wide range of financing options for your care. There are Deferred Interest options that allow you to pay for purchases of $200 or more with minimum monthly payments made throughout the duration of your promotional period. Interest accrues during the promotional period but will not be charged if you pay your balance in full by the end of the promotional period.
There are also Reduced APR special financing options of 24, 36, 48 and 60 months for larger purchase amounts ($1,000 or more for 24 months with a 14.9% APR, 36 months with a 15.9% APR, 48 months options with a 16.9% APR, and a 50 month option for purchases over $2,500 with a 17.9% APR).
These options allow you to make monthly payments with a reduced interest rate over the duration of your promotional period. There are no prepayment penalties at any time with CareCredit.
Smile Hilliard Membership Club
At Smile Hilliard, we believe that everyone should have access to high quality dentistry and customer service, regardless of the availability of traditional dental insurance. With this in mind, we are proud to offer our own In-House Membership Club for patients without dental insurance benefits! There are three different membership types: Adult HealthyCare, Child HealthyCare, and Adult PerioCare.
Upon joining our club, a patient will receive all their preventative services included plus an additional 15% off any diagnosed treatment. After an initial investment of $145 per enrollee (which covers the initial appointment), a patient then pays a low monthly fee via credit card EFT.
This is a much better option compared to what most self-purchased insurance plans will offer for the cost. There are no claims to file, no waiting periods, no denials and no hassles that are experienced with traditional insurance plans.
Details of the different membership club options are available here: Smile Hilliard Membership Club. All you need to sign up is an email address and a credit card for the monthly billing. There is no long-term obligation and the membership may be cancelled at any time.
NOTE: This blog was initially published on Smile Hilliard’s practice blog on October 27, 2021 under the title Health Savings Account (HSA) or a Flexible Spending Arrangement (FSA). The author has since edited and updated all information to be current as of publication.