Quite frequently I am asked which dental insurance is the best. My answer? Well, unless you get complimentary dental insurance through an employer, you may want to consider an alternative. I call dental insurance a benefit, it does help cover some dental costs, though none of them cover everything. But do you really understand what the money is being used for and what the hidden costs are to you?
Did you know that you have options besides dental insurance? I have so many people think they cannot have any dental treatment done because they don't have insurance, they just can't afford it. The truth is, you may be paying more to HAVE dental insurance than not.
We are given the option, through the federal government, to pay for health-related expenses through a health savings account, or an HSA. What is a health savings account? It is a savings account you can set up through a bank, a financial institution, or an insurance company that is used for qualified medical expenses. Dentistry is one of those expenses.
Now, there are limitations to qualify for an HSA, and that is that you have to have a high deductible health plan. That means you have a medical insurance plan where the deductable is between $1350 per person or $2700 per family per year and $6650 per individual or $13,500 per family per year.
So check on your medical insurance, and if you qualify, then please listen!
There are four main benefits to having an HSA account:
- Money put into the account is 100% tax deductible, so no taxes are taken out on it. That includes any interest the account accumulates. That will lower the amount of taxes you pay every year.
- Money does NOT have to be used by a certain date. It can be used even through retirement and can continue building for years. In retirement it can even be used for some living expenses.
- The money is yours. It is easily transferred from bank to bank, so if you move or change jobs, it's no big deal to move money around. Trying to move 401K or IRA accounts if you've switched jobs can be very difficult or not possible at all without losing money.
- There are dozens of eligible expenses the money can be used for, not just medical expenses, many of which you might not be aware of.
I have been using an HSA for several years for my own family’s health related costs. I just went to a local bank, got an HSA account, and was issued a debit card. If I don’t have the card on me when I make a purchase, I just pay myself back. It would be wise to keep track of your purchases for tax purposes.
So in my experience, if I were at a crossroads whether to find a dental insurance plan or do an HSA, I would recommend the HSA. You manage your own money for dental and health related expenses instead of paying into the insurance bureaucracy, you have tax advantages, and you save money.
Check out the links below for more information on HSA's.
Health Savings Accounts Tax Information
Health Savings Accounts Eligible expenses
Government Information about Health Savings Account
Shop HSA Accounts