When you first hear that traditional insurance policies don’t cover LASIK eye surgery, you might feel an understandable sense of frustration. It’s an elective procedure, and aside from a few select cases, most insurers consider it less than medically necessary. That leaves you with one big question: How will you pay for this amazing life changing procedure that you really want to have?
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are two ways to pay for LASIK, and can help you save money when you decide to have this procedure.
Here’s an overview of the costs of LASIK and how HSAs and FSAs can be used to help cover them.
The cost of refractive eye surgery varies based on several factors:
With an experienced surgeon, LASIK can be a great investment, but it’s important to understand the value of refractive surgery. Not only will LASIK save you money in the long run when compared to glasses and contact lenses, but it’s also a safer option for your eyes. Laser eye surgery offers a lower lifetime risk for serious complications than wearing contacts over the same time period.
Many people have either a Flexible Spending Account, or FSA, or a Health Savings Account, also known as an HSA either as a standalone option or in addition to a standard health insurance policy.
These are increasingly common alternatives to conventional insurance. The owner of one of these accounts contributes a portion of their income to spend on medical and health care expenses. The advantage of one of these accounts is that the money that gets deposited is not subject to federal income tax. These are called “tax-advantaged” accounts for this reason.
When an HSA or FSA is sponsored by a person’s employer, the employer will typically deposit money into the employees’ HSAs or FSAs as well. Some companies have a direct match policy where they contribute the same amount as their employees. It should be noted that the IRS does put a cap on the amount able to be saved using these accounts.
Both are eligible to be used to pay for LASIK in the current fiscal year.
An HSA, or Health Savings Account, is only open to those with a high-deductible health plan (HDHP). This means that their health insurance doesn’t cover many of their expenses, at least not until the costs get to a certain point. In this case, they have an HSA to help cover qualifying expenses, including the following:
At the end of the year, HSA accounts roll over, meaning that you don’t have to use it before the end of the year. However, this doesn’t change your maximum contribution for the following year.
Yes, LASIK is a qualifying medical expense for most HSA accounts. HSA funds can be used to help cover the cost of LASIK and most accompanying expenses.
An FSA is similar to an HSA but with a few key differences. First, you don’t have to have a high-deductible health plan to be eligible for an FSA. The funds in an FSA are also time-sensitive, meaning that unlike an HSA, they run out at the end of the year.
FSA funds can be used to help cover the same expenses as HSAs can. Depending on the fiscal year, FSAs and HSAs may have different contribution limits, set by the federal IRS for the year in question.
Yes, LASIK is eligible to be covered by an FSA for most accounts. This is a popular option for many people who still have funds in their FSA at the end of the year, because if they don’t use it on health care costs, the money is lost. Making an investment in better vision is a worthy way to use remaining funds in an FSA.
Yes, but there are IRS regulations that limit people from having both accounts. This is because, if a person has an HSA and an FSA, it could double the amount of tax-free income they could keep in these accounts, as well as enabling them to roll over more of the HSA funds at year’s end by only spending FSA funds.
If you have an HSA, the only way you can also have an FSA is if you have what’s called a Limited Purpose FSA, or an LPFSA. You can only spend funds in an LPFSA on eligible dental and vision expenses for you and your beneficiaries. The good news, though, is that LASIK is qualified as an eligible expense for an LPFSA. This means that if you have both, you can save the funds that roll over while using tax-free income to help pay for refractive eye surgery.
The first step in using an FSA or HSA to help pay for LASIK is to see if you’re eligible for the surgery. LASIK candidacy depends on your current eye health and medical history, as well as your age and vision prescription, among other factors.