One common way to pay for LASIK or other laser vision correction surgery is using a Flexible Spending Account (FSA) or Health Savings Plan (HSA). LASIK and other laser vision correction methods are considered eligible expenses for both FSAs and HSAs. If you’re planning to have LASIK within the next year, an FSA or HSA is a great way to save.
What is a Flexible Spending Account?
Unlike a typical savings account, Flexible Spending accounts allow you to set aside money pre-tax. This lowers your taxable income and allows you to pay for healthcare related expenses with money that isn’t taxed. The 2019 maximum FSA contributions are $2,700 up $50 from 2018.
If you plan to set aside the full $2,700, your employer will divide that amount equally between your 2019 paychecks. But the total amount of money that you plan to contribute to your FSA is available to spend on January 1st. This means you don’t have to wait another year to have LASIK – the money is available to you immediately.
FSA money is use it or lose it, meaning that money left in your account at the end of the year is returned to your employer. Employers are allowed to offer employees two options with these funds: a $500 rollover, which allows $500 of FSA to rollover into your account for the next year or a “grace period” which gives you 2.5 months to spend the remaining money in the FSA account. Check with your employer for details on what type of option your plan provides.
What is a Health Savings Account?
A Health Savings Account is another savings account that allows you to set aside money pre-tax. Unlike FSAs, HSAs are only available with high deductible health insurance plans (HDHP), which are defined as insurance plans with a deductible of $1,350 for self-only or $2,700 for family coverage.
You can contribute up to $3,500 each year into an HSA plan for yourself or $7,000 for a family HDHP plan. Unlike an FSA, these funds are yours to keep, and will rollover with you into the new year. But these funds are not available to spend until they have been added to your account. If you decided to save money in an HSA for LASIK surgery, you’d have to wait until the funds accumulate to pay for the surgery.
Can I use both an FSA and an HSA?
You can use a dependent care FSA, limited purpose FSA, or post-deductible FSA at the same time as an HSA. It’s likely that if you’re offered an HSA through your employer, the FSA offered will already be a limited-purpose FSA. Limited purpose FSAs cover dental, vision, and other expenses like LASIK but not medical or prescription costs. A post-deductible FSA only allows you to use the funds for medical expenses after meeting the deductible on a high deductible plan.
If you’re worried that FSA funds won’t fully cover your procedure but you want LASIK now, it may still be possible: you can use an HSA to save this year, and use CareCredit which offers 0% financing for 12 months.
Should I use an FSA or HSA to pay for LASIK?
Using an FSA or HSA to pay for LASIK or other laser vision surgeries is a good technique to save money because it reduces your taxable income. It’s important to have a LASIK consultation before saving money for LASIK or PRK in an FSA or HSA. Some people are not eligible to have LASIK, so saving money in an FSA or HSA may not be the best use of your money. In addition, most LASIK surgeons charge based on your refractive measurements, which are determined during a consultation.
To find out if you should start saving money for LASIK, schedule a free consultation at Lipstock LASIK & Cataract Center.