Can I Use an HSA for LASIK?

The Cost of Lasik

If you are thinking about getting LASIK eye surgery, paying for the procedure might be one of your top concerns. Many LASIK surgeons charge anywhere between $4,000 to $5,000 for both eyes. Of course, this is a significant expense you want to plan for.

Most health care plans do not cover LASIK since laser vision correction procedures are considered elective (not medically necessary). Some vision insurance plans do offer a discount on LASIK. These discounts are usually around: 

• 15 percent off standard LASIK pricing
• 5 percent off promotional LASIK pricing

However, if you do not have an insurance plan that offers a discount, an HSA (Health Savings Account) is an excellent way to save on LASIK costs. According to the IRS, you can apply HSA funds towards LASIK because it is an eligible expense.

What Is an HSA?

A Health Savings Account (HSA) is a tax-exempt bank account you can use to pay for certain out-of-pocket medical expenses. To qualify for an HSA, you must enroll in a high-deductible health plan. You may be able to open an account through your employer if they offer the option. Otherwise, you can sign up on your own if you are eligible for an HSA.

Once you open an HSA, the IRS allows you to set aside a certain amount of money in your HSA per year. The contribution limits may fluctuate from year to year, so be sure to check with the IRS before funding your account. 

For 2021, you can contribute up to $3,600 for individual coverage or $7,200 for family coverage in your HSA. These funds can be used for many medical procedures and services, including eyeglasses, contact lenses, cataract surgery, and laser eye surgeries such as LASIK and PRK.

HSA vs FSA

A Flexible Spending Account (FSA) is a spending account that allows you to set aside pre-tax dollars towards healthcare expenses. You can open an FSA through your employer if they offer the option. You can open an FSA without a health insurance plan, unlike an HSA. You can also access FSA funds at the beginning of the year and pay them back with deductions from your paycheck throughout the year.

However, an HSA has a higher contribution limit and your funds roll over. The full amount of your FSA account funds need to be used by the end of the year, or within the grace period set up by your employer. Otherwise, they don't roll over to the next year.

If your employer allows, you can open both an HSA and FSA. You can combine the funds to pay for your LASIK surgery.

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Benefits of HSAs

An HSA has many benefits, including: 

Reduces Income Tax Liability

Any money you put into the account can be claimed as a tax deduction. This reduces your tax liability, so you pay fewer taxes when April comes around. 

Tax-Free Account

You do not have to pay taxes when you contribute or withdraw money from the account. If you have an HSA through your employer, you use pre-tax dollars to fund the HSA. If you opened an HSA on your own, any funds you add are tax-deductible. Also, any interest you earn is not taxed.

Your Funds Rollover

The money you set aside will roll over from year to year. Unlike a Flexible Spending Account (FSA), you do not have to use up the funds each year before they expire.

You Can Invest The Money

If you are not planning to use your HSA anytime soon, you can invest the balance and use the account to save money for retirement. Of course, it is a good idea to speak to your financial adviser about any investments you plan to make.

Can You Use HSA for LASIK?

Yes, using your HSA for LASIK is simple. When you open an HSA, you get a debit card or checks that are associated with the HSA account. You can then fund the account up to the yearly limit set by the IRS. Since the money rolls over, you do not have to worry about using up the funds by the end of the year. 

Once you are ready to have your LASIK surgery, you can use the HSA-linked debit card or checks to pay for your procedure. Because you don’t need to pay taxes on these funds, you can save quite a bit of money on your LASIK eye surgery.

Can You Use an HSA or FSA for Glasses and Contacts?

Yes, you can use your FSA and HSA to pay for prescription eyewear. Non-prescription eyewear is not considered a medical expense, so it is not covered by either account.

You can use an HSA or FSA to pay for:

• Prescription eyeglasses (including bifocals, progressive multifocals, and reading glasses)
• Prescription sunglasses
• Eyeglass frames (without lenses)
• Contact lenses (along with cleaning solutions and eye drops)
• Sports or safety goggles that have prescription lenses

Eyewear items that are not considered eligible expenses for HSA and FSA spending include:

• Sunglasses without prescription lenses
• Colored contact lenses that do not correct your vision
• Extended warranties for eyewear
• Insurance for eyewear

You can also use your HSA to pay for comprehensive eye exams, as well as screening for cataracts, glaucoma, and other serious eye conditions.

Takeaways

• The average cost of LASIK is between $4,000 and $5,000 for both eyes
• A Health Savings Account (HSA) is a tax-exempt bank account you can use to pay for certain medical expenses
• The 2021 maximum limit you can contribute to your HSA is $3,600 for individual coverage or $7,200 for family coverage
• You can combine your HSA and FSA to pay for LASIK
• Other things you can pay for with your HSA include: prescription eyeglasses, contact lenses, prescription sunglasses, eyeglass frames, prescription sports or safety goggles, eye exams and eye health screening.

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