Author
Scott Judson
Did you know your Health Savings Account (HSA) can help pay for dental care while offering tax benefits? Here's how you can use HSA funds for eligible dental services, avoid common mistakes, and maximize savings:
What’s Covered: Preventive care (like cleanings and exams), medically necessary procedures (root canals, fillings, implants), and orthodontic treatments (braces, aligners).
What’s Not Covered: Cosmetic treatments (teeth whitening, veneers) and over-the-counter products (toothpaste, floss).
2024 Contribution Limits: $4,150 for individuals, $8,300 for families, with an extra $1,000 if you’re 55 or older.
Key Rules: Services must treat or prevent dental issues, and proper documentation (receipts, treatment plans) is essential.
Pro Tip: Use tools like Reimbursable ($19/year) to track eligible expenses, store receipts, and simplify tax reporting.
Keep reading for a detailed breakdown of covered services, IRS rules, and tips for managing your HSA effectively.
Can I Use An HSA For Dental Expenses?
HSA Dental Coverage Rules
Knowing the rules for HSA-eligible dental expenses can help you use your HSA funds wisely. The IRS has clear guidelines about which dental services qualify for reimbursement.
IRS Requirements
The IRS outlines what counts as qualified medical expenses (QMEs) for HSA purposes. For dental services to qualify, they must:
Be primarily for treating, preventing, or diagnosing a dental condition.
Not be cosmetic procedures.
Meet the documentation requirements outlined below.
These rules ensure that the expenses align with necessary dental care. Let’s dive into the specific service criteria for HSA dental reimbursements.
Dental Service Requirements
In addition to the IRS guidelines, dental procedures must meet the following standards:
Medical Necessity: The service must address or prevent a dental issue.
Licensed Professionals: The treatment must be performed by a licensed dentist or dental professional.
Proper Documentation: Records should include:
The date and description of the service.
Details about the provider.
A breakdown of costs.
Proof of payment.
To make managing these records easier, tools like Reimbursable can automatically identify eligible dental expenses and securely store digital records.
Tip: Keep all documentation for at least three years after filing your taxes in case the IRS requests verification. Tools like Reimbursable can help you stay organized and compliant.
Covered Dental Services
Knowing which dental services qualify for HSA reimbursement can help you make the most of your health savings. Here’s a breakdown of eligible procedures based on IRS guidelines.
Preventive Care
These services focus on maintaining oral health and are generally covered:
Platforms like Reimbursable can automatically track recurring expenses through bank integration, making it easier to manage these costs.
Medical Procedures
HSA funds can also be used for a variety of medically necessary dental treatments, including:
Emergency Services: Root canals, tooth extractions, and abscess treatments
Restorative Care: Fillings, crowns, bridges, and dental implants
Periodontal Treatments: Deep cleanings, gum surgery, and bone grafts
Pain Management: Treatments for TMJ disorders and other dental pain
Keep all receipts and documentation for these services; platforms like Reimbursable can securely store them for IRS audits.
Braces and Aligners
Orthodontic treatments are eligible for HSA reimbursement if deemed medically necessary. Covered services include:
Traditional metal braces, ceramic braces, or clear aligners prescribed by an orthodontist
Retainers, necessary X-rays, dental models, and adjustment appointments
Since orthodontic care often involves long-term payment plans, accurate record-keeping is crucial. Tools like Reimbursable can help track these expenses and ensure compliance.
For smoother management of HSA spending, consider using a platform that offers features like automatic expense detection, secure receipt storage, and bank integration.
Non-Covered Dental Expenses
It's just as important to know what isn't covered as it is to understand what is.
Cosmetic Procedures
Dental procedures done purely for appearance are not covered. These include:
Teeth whitening
Dental veneers
Tooth jewelry
Gum contouring
However, if a cosmetic procedure becomes medically necessary - like veneers after an accident - it may be eligible with proper documentation. Everyday dental products also fall outside coverage.
Over-the-Counter Products
Over-the-counter dental care items are not reimbursable. Examples include:
Regular and electric toothbrushes (including replacement heads)
Toothpaste and tooth powder
Dental floss and water flossers
Mouthwash and oral rinses
Teeth whitening kits or strips
Denture adhesives and cleaners
Using tools like Reimbursable can make it easier to track which expenses are eligible.
HSA Dental Expense Management
Keep important documents like itemized receipts, Explanation of Benefits (EOBs), payment proofs, and treatment plans organized and secure. These records are crucial if the IRS reviews your HSA distributions.
Record Keeping
Documents such as itemized receipts, EOBs, and treatment plans are key for staying compliant with IRS rules while also making digital tracking easier.
Expense Tracking Tools
Digital tools can simplify managing HSA expenses. For example, Reimbursable connects directly to HSA, credit, or checking accounts using Plaid integration, making it easier to automatically detect eligible expenses.
Alex Rodriguez states the tool streamlines expense tracking compared to manual methods.
Reimbursable offers two subscription options:
*Note: The Full Service plan will be available soon.
Planning HSA Spending
Good record keeping and digital tools make it easier to plan how you use your HSA funds. Here are some helpful strategies:
Contribution Planning: Estimate your annual HSA contributions based on expected dental costs, including routine care and any major procedures.
Balancing Investments: Keep enough liquid funds in your HSA to cover dental expenses, while investing any extra for long-term savings.
Timing Procedures: Schedule costly dental treatments to align with your HSA contributions for better cash flow management.
WOW I've been looking for a solution for medical expense tracking for sooooo long. Reimbursable greatly simplifies my medical expense tracking. I LOVE that I can track my total reimbursable amount. tons of peace of mind with this product!
2024 HSA Updates
The IRS has released updates to Health Savings Account (HSA) regulations for 2024, which could affect how you handle dental expenses.
2024 Contribution Limits
HSA contribution limits for 2024 have been adjusted to reflect inflation:
To make the most of your HSA, consider dividing your expected annual dental costs over 12 months. Don’t forget to account for larger procedures and family dental care when planning contributions.
Updated Coverage Rules
The IRS has maintained its guidelines for which dental services qualify for HSA reimbursement. Here’s what you need to know for 2024:
Dental services must aim to treat or prevent dental disease.
Cosmetic procedures, such as teeth whitening, are not eligible.
Dental insurance premiums generally don’t qualify.
Pre-paying for future dental services is not allowed.
These rules highlight the importance of staying informed when managing dental expenses through your HSA.
Policy Changes and Digital Tools
New digital tools are making it easier to manage HSA dental expenses. Features include:
Automatic recognition of qualified dental expenses
Secure digital storage for receipts and related documents
Easy report generation for tax compliance
These tools can simplify record-keeping and ensure you stay aligned with HSA regulations, making it easier to manage your dental care expenses.
Summary
Main Points
Manage HSA-eligible dental services in 2024 by keeping these key aspects in mind:
Updated Contribution Limits
The 2024 HSA contribution limits have increased, making it easier to allocate funds for dental expenses. These updates align with IRS guidelines, covering eligible services and strategies for managing costs effectively.
Qualifying Services Requirements
The IRS specifies that only dental procedures aimed at treating or preventing dental disease are eligible for HSA reimbursement. Here's a breakdown:
Preventive Care: Covered if deemed medically necessary.
Disease Treatment: Eligible for specific medical conditions.
Cosmetic Procedures: Not covered, as they are considered aesthetic.
Pre-payments: Ineligible, since services must be completed first.
Expense Management and Documentation
Use digital tools to track and document all eligible dental expenses. For instance, Reimbursable's $19 DIY plan simplifies this process by automatically identifying eligible expenses, storing digital receipts, tracking distributions, and assisting with tax form 8889. Proper documentation is crucial for supporting any claims.