Can I Use FSA to Pay for Orthodontics?

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to set aside pre-tax money for qualified healthcare expenses. This reduces taxable income, as contributions are deducted from an employee’s paycheck before taxes. The primary purpose of an FSA is to provide a tax-advantaged way for participants to manage out-of-pocket medical, dental, and vision costs.

Understanding Eligible Orthodontic Expenses

Orthodontic treatments are generally considered eligible expenses for reimbursement through a Flexible Spending Account. This includes services like traditional metal braces, clear aligners such as Invisalign, and retainers. Eligibility for these treatments depends on medical necessity, not solely cosmetic desires. A diagnosis from a dental professional establishes this medical need, confirming the treatment is for the diagnosis, cure, mitigation, treatment, or prevention of a disease or to affect the structure or function of the body.

The Internal Revenue Service (IRS) outlines eligible medical expenses in Publication 502, which includes orthodontia. Initial consultations, diagnostic records, and down payments for orthodontic work are also eligible expenses. If a portion of the orthodontic cost is covered by a dental insurance plan, FSA funds can be used to pay for the remaining out-of-pocket balance. Confirm with the FSA administrator and review plan documents for specific coverage details.

Practical Steps for Using Your FSA

Many FSA plans provide a debit card, which can be used directly at the orthodontist’s office to pay for eligible services. If a debit card is not available, or for expenses paid out-of-pocket, individuals can submit a reimbursement claim to their FSA administrator. This requires submitting specific documentation.

Required documentation includes an itemized receipt, an Explanation of Benefits (EOB) from your insurance provider, or a copy of the orthodontist’s contract. This documentation must clearly show the date(s) of service, the provider’s name, the type of service performed, the patient’s name, and the amount charged. For multi-year orthodontic treatments, some plans may permit reimbursement for a lump-sum prepayment, where the date of service is deemed the date of payment. Alternatively, if payments are made in installments, claims can be submitted as each payment is incurred. Claims can be submitted through an online portal, by mail, or via fax.

Key Rules and Management Tips

A primary rule governing FSAs is the “use it or lose it” provision, which requires participants to spend their allocated funds by the end of the plan year or forfeit any remaining balance. Many employers offer either a grace period, up to two and a half months into the new plan year, or a carryover option, allowing a limited amount of unused funds to roll over. For 2025, the maximum carryover amount is $660. Employers cannot offer both a grace period and a carryover.

For 2025, the maximum employee contribution is $3,300. If both spouses participate in an FSA through their respective employers, each can contribute up to this limit. When planning for orthodontic costs, which can span multiple years, estimate the total expense and coordinate payment schedules with the orthodontist. Some plans allow for front-loading payments, enabling participants to be reimbursed for a larger portion of the cost in one plan year, while others necessitate monthly or annual payments.

If an individual changes employers, FSA funds typically do not transfer. Spend any remaining balance and submit all reimbursement claims before the termination date to avoid forfeiture.