Healthcare Flexible Spending Accounts (FSAs) are a popular employee benefit that allows individuals to set aside pretax money for eligible medical expenses.
While many people are familiar with using FSA funds for routine dental care, such as cleanings and fillings, they might be unaware of hidden ways to maximize benefits.
The short answer is yes, FSAs can be used to cover the cost of dental implants.
The better answer is you make the most from an FSA by employing different strategies based on whether you are replacing a single tooth or your whole mouth.
You will be amazed at how an FSA can make treatment more affordable!
FSA for Single-Tooth Implants
First, we’ll see how an FSA can make single-tooth dental implants more affordable by lowering taxes and allowing you to pay for treatment over a year.
Unlike nonexistent government grants, an IRS-approved FSA is a real way to save on dental implants, and it’s crucial to know its key benefits.
Pre-Funding
Many employees and patients are unaware that their FSA does not require pre-funding and provides excellent dental implant benefits.
Employees can access the full amount in their FSA for dental implants at the start of the year, even without prior contributions. Over the year, they repay the advanced amount through pre-tax deductions from their paycheck.
For some, an FSA is a better option than a loan. Patients with bad credit can fund treatment immediately, with no credit check and no interest to pay.
Bad Credit
Patients with poor credit histories can use their FSA to pay for single-tooth implants. The FSA does not consider past financial issues like delinquencies or bankruptcy.
IRS Section 125 governs FSAs under a cafeteria plan. It prohibits employers from discriminating based on credit history or score for FSA participation.
Financing dental implants is challenging for patients with bad credit. An FSA offers these patients an alternative despite their adverse consumer report history.
No Credit Check
Employees can use their FSA to cover the cost of single-tooth implants upfront, and employers won’t check their credit reports or scores.
IRS Section 125 rules prevent employers from checking employees’ credit reports or FICO® and Vantage® scores. All employees must have access to the FSA benefit.
Dental financing without a credit check is rare. Still, an FSA enables patients to start treatment immediately without an employer credit report check.
Interest-Free
Employees can use their FSA to pay for single-tooth implants upfront without incurring interest charges. Moreover, employees save on taxes because contributions to their FSA are pre-tax.
Under IRS Section 125 rules, employers cannot charge interest on the money they advance to fund qualifying expenses. The pre-tax payroll contributions that occur later reduce the employees’ taxable income for federal, state, and FICA taxes.
Interest-free medical loans are hard to find. Using an FSA allows patients to avoid borrowing costs while saving money on taxes.
Use-It-Or-Lose-It
The use-it-or-lose-it rule should not dissuade patients from using an FSA to pay for dental implants. This guideline means employees must forfeit any unspent money at the end of the plan year.
However, the cost of single-tooth implants without insurance virtually guarantees that patients will not have to forfeit any money. The projected expenses typically exceed the contribution limits.
- Average cost of single tooth implant: $3,500
- Annual FSA contribution limit: $3,200
Grace Period
The grace period protects you from the use-it-or-lose-it provision when using your FSA to pay for single-tooth implants. Many employers offer a grace period or a carryover option that allows employees to use their funds beyond the plan year’s end.
The grace period protects you in case treatment spans more than twelve months, which frequently occurs. For example, the healing time between extractions, bone grafting, body placement, and abutment insertion could push the timing to fourteen months.
FSA for Full-Mouth Implants
Next, we explore using a Flexible Spending Account and maximizing the benefits of full-mouth dental implants, a far more expensive procedure. Contribution limits restrict the benefits, but intelligent planning can offset the drawbacks.
Contribution Limit
The contribution limit makes it less desirable to use an FSA to pay for full-mouth dental implants, which cost at least $35,000 and often range higher.
The annual limit changes yearly, but the best case is that an FSA might cover only 10% or 20% of full-mouth replacement costs without insurance.
- 10%: one person contributes the maximum ($3,050 at the publication date)
- 20%: your spouse contributes the maximum through their employer
Using an HSA to pay for full-mouth dental implants works much better, even though a Health Savings Account also has annual contribution limits. Unlike an FSA, you can reimburse yourself for eligible expenses in future years.
Healing Time
The healing time between the possible treatment steps can overcome the annual contribution limit issue when using an FSA to pay for full-mouth dental implants. With crafty planning, you could expand the 20% coverage level to 60%.
Your prosthodontist cannot install a full-mouth replacement in one day because you must wait for your jaw and gums to heal after each step and for osteointegration to complete. A precisely timed treatment plan taking 25 months could span three FSA plan years, tripling the benefits!
| Step | Months to Heal |
| Tooth Extractions | 1 to 4 |
| Bone Grafting | 4 to 12 |
| Body Placement | 4 to 6 |
| Abutment Insertion | 1 to 3 |
When FSA Covers Implants
Healthcare flexible spending accounts usually cover dental implants when necessary for health and well-being. However, many insurance plans classify tooth implants as cosmetic, which could discourage employees from making FSA contributions.
Therefore, knowing the criteria for dental care to be deemed medically necessary or cosmetic by FSAs and insurance plans could help alleviate concerns.
Medically Necessary
Your FSA should cover dental implants when the plan administrator classifies the treatment as medically necessary. You might find varying definitions for this term, so do not allow these differences to dissuade you from contributing the maximum and filing a claim.
- Medically necessary dental implants for health insurance adhere to the highest standard: they are appropriate for the evaluation and treatment of a disease, condition, illness, or injury consistent with the applicable standard of care.
- Medically necessary dental implants for Flexible Spending Accounts have a more lenient standard: you lost teeth due to injury or periodontal disease, and the replacement teeth are needed for your health and well-being.
- Medically necessary tooth implants with dental insurance have standards similar to an FSA, but benefits are often excluded for this particular procedure due to the expense compared to dentures.
In other words, just because your medical or dental insurance company rejected your claim does not mean your FSA administrator will, too. They all follow different rules.
Cosmetic Procedures
An FSA does not cover dental implants when the plan administrator deems the procedure cosmetic: altering healthy tissue to improve appearance. You might encounter this problem if you replace existing teeth because they are worn, discolored, or misshaped.
You do not want to contribute the annual maximum and then lose the money due to a denied claim. Therefore, take several proactive steps to overcome the cosmetic exclusion rule.
- Visit your dentist for a treatment plan and cost estimate and to document the medically necessary reason you need to replace your teeth.
- Submit the documentation to your FSA administrator for preapproval.
- File the preapproval from the plan administrator in a safe place for later use.
- Choose the appropriate contribution amount during open enrollment based on the cost estimate provided by the prosthodontist.
- Schedule the initial procedure during the first month of the plan year to maximize the benefits.
- Take advantage of the interest-free financing
- Constrain single-tooth expenses into one year
- Spread full-mouth expenses over several years
- Submit a claim for reimbursement to your FSA administrator, including all necessary documentation, such as the itemized receipt and proof of preapproval.
