Can You Use Your HSA to Pay for LASIK?

You can use Health Savings Accounts (HSA) to pay for LASIK. When you open an HSA, you get a debit card or associated checks.

You can then fund the account up to the yearly limit set by the IRS. Because the money rolls over, you won’t have to worry about using up the funds by the end of the year.

Once you’re ready to have your LASIK procedure, you can use the HSA-linked debit card or checks to pay for the procedure. Furthermore, you can use your HSA to cover the cost of LASIK surgery using pre-tax money.

How Much Does LASIK Eye Surgery Cost?

Many LASIK surgeons charge anywhere between $4,000 to $5,000 for both eyes. Unfortunately, many healthcare plans don’t cover LASIK because laser vision correction procedures are considered elective (not medically necessary).

Due to its cost, many people seek discounts or payment plans that help reduce the cost of the procedure. Some vision insurance plans do offer discounts on LASIK, which are usually around:

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

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 toward LASIK since it’s 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 can 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 2023, you can contribute up to $3,850 for individual coverage or $7,750  for family coverage in your HSA.

What Procedures Can You Use HSA For?

You can use your HSA funds for many medical procedures and services, including:

• Eyeglasses
• Contact lenses
• Cataract surgery
• LASIK and PRK

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. Your HSA contributions also go into your account before taxes. This reduces your tax liability, so you pay fewer taxes in April.

You also save pre-tax dollars when you use your HSA.

Tax-Free Account

You don’t have to pay taxes when contributing or withdrawing 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 alone, 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.

Saves on Medical Expenses

In the same way, you can use your HSA to pay for contacts and eyeglasses. You can also pay for other procedures, like dental care. You can use your HSA funds to pay for coinsurance, copays, and deductibles tax-free.

If you use your funds for non-eligible expenses, you’ll have to pay taxes and a penalty on the money you spend. Fortunately, the penalty no longer applies to people ages 65 and above.

You Can Invest Your Balance

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, speaking to your financial adviser about any investments you plan to make is a good idea.

Health Savings Accounts vs Flexible Spending Accounts

A Flexible Spending Account (FSA) is an account that allows you to set aside pre-tax dollars toward healthcare expenses. It has some similarities with an HSA but will vary in different aspects.

Similar to an HSA, you can open an FSA through your employer if they offer the option. You can also access FSA funds at the beginning of the year and pay them back with deductions from your paycheck throughout the year.

Unlike an HSA, you can open an FSA without a health insurance plan. However, an HSA has a higher contribution limit, and your funds roll over.

The full amount of your FSA account funds must 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.

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

You can use your FSA and HSA to pay for prescription eyewear. You can use an FSA or HSA to pay for:

• Prescription eyeglasses (including bifocals, progressive multifocal, 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

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

What Isn’t Eligible for HSA or FSA Expenses?

Non-prescription eyewear is not considered a medical expense, so either account does not cover it. 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

Summary

The average cost of LASIK is between $4,000 and $5,000 for both eyes. However, you can use a Health Savings Account (HSA) to pay for the procedure.

An HSA is a tax-exempt bank account you can use to pay for certain medical expenses. The 2023 maximum limit you can contribute to your HSA is $3,850 for individual coverage or $7,750 for family coverage.

You can also use a Flexible Spending Account (FSA) to pay for LASIK alongside your HSA. You can also use your HSA to pay for prescription eyeglasses, contact lenses, eye exams, and more.