If you’re a contact lens or glasses wearer, it’s safe to assume you’ve considered or even looked into LASIK. After all, it is the world’s most popular elective surgery and has helped tens of millions of people suffering from nearsightedness, farsightedness, and astigmatism.
As the end of the year draws near, it is a great time to consider freeing yourself from glasses or contact lenses once and for all. Not only will scheduling your Oklahoma City LASIK procedure early help you avoid the holiday LASIK rush, but if you have an FSA or HSA, you’ll get the tax benefits of using those special funds before they run out.
FSA & HSA 101
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are pre-tax accounts that can be used to pay for qualifying medical expenses, including copays, deductibles, and drug costs.
The money in these accounts, whether contributed by you or your employer, is not subject to taxes, so you do not have to include it when calculating your taxable income. In essence, FSAs and HSAs allow you to receive medical services, including elective procedures like LASIK, while reducing your tax burden.
Using FSA and HSA funds for LASIK
According to the IRS, the funds in HSAs and FSAs can be used for “the diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body.” The list of accepted expenses includes laser eye surgery.
Designating LASIK as a qualifying expense is significant because it is typically considered an elective procedure; therefore, most insurance companies do not cover it. Many people use their HSAs or FSAs to cover medical services and treatments that are not covered by most insurance plans. In addition to LASIK, these treatments include chiropractic services, therapeutic massage, acupuncture, and physical therapy. Some people also use FSA and HSA funds for preventive healthcare services or alternative therapies.
If you decide to use the funds in an HSA or FSA, you should be sure that the expense fits within the parameters set by the IRS. LASIK in Oklahoma City is a qualifying expense, but you will need to keep your receipts and records from your procedures or purchases in case the IRS asks to prove that your expenses were eligible.
HSAs work like regular bank accounts. If you undergo LASIK surgery, you can pay the provider directly. Some HSAs even have debit cards to facilitate quick payments. You can withdraw funds from your HSA anytime. But if you use HSA funds to pay for anything other than a qualified medical expense, those funds will be taxed as ordinary income and the IRS will charge an additional 20% penalty.
FSA usage depends on your employer’s policy. Some accounts have debit cards like HSAs. However, other accounts may require you to pay for the LASIK out of pocket and then submit a claim for reimbursement.
Maximum FSA and HSA Contributions
HSAs and FSAs can be used to pay for many of the same healthcare expenses, including LASIK, but there are some distinct differences between the two savings plans. One of the main distinctions is that they each have different contribution rules. The limits for these accounts can change yearly, and the amounts get set by the IRS.
HSAs are controlled and funded by the individual and currently have annual contribution limits of $3,650 for self-only and $7,300 for a family. Those over 55 years of age can contribute an additional $1,000. At the end of the year, HSA funds roll over.
FSAs are controlled by an employer and have an annual employee contribution limit of $2,850. If an employer contributes to a health care FSA, they can provide up to $500 of unmatched contributions to an employee’s FSA. Starting at $501, employers must match the employee’s contribution dollar-for-dollar. Some health FSAs offer grace periods or carryover allowances so employees can spend unused funds.
The limits for these accounts can change yearly, and the amounts get set by the IRS.
Covering the Cost of LASIK
Depending on the balance in your account, your HSA or FSA funds may cover all or a portion of the cost of the LASIK procedure. If your account funds do not cover the full cost, you will have to cover the rest out of pocket.
At nJoy Vision, if your FSA or HSA funds do not cover the entire procedure, you have the option of financing the remainder through our financing partner, CareCredit.
We also partner with many vision insurance companies that offer their members discounts on certain laser eye procedures, including LASIK. Ask an nJoy Vision associate if your insurance provides partial coverage or discounts on LASIK.
Managing FSAs and HSAs
Another difference between HSAs and FSAs is how they are set up and managed.
Whereas FSAs don’t have any health insurance requirements, you must be covered by a high-deductible health plan to contribute to an HSA.
FSAs are offered by your employer as part of the company’s benefits offering, so unused funds at the end of the year are returned to the employer. Returned funds can be used by the employer to offset administrative costs, reduce premiums the following year, or they can be equally distributed to employees who enroll the next year.
Pump up the Savings at nJoy Vision
If you have an FSA or HSA and are finally ready to make glasses and contact lenses a thing of the past, we’ll show you how to flex those bennies and save on LASIK at nJoy Vision!