HSA & PrePaid Dental Plan

[gleb001]

Is a PrePaid Dental Plan a qualified expense? I am past 65. This is not an insurance plan and not a discount plan from an insurance provider. It is a Dental Discount Plan specific to my dentist which involves normal exams and care for a year. I know all the services given within the plan are definitely qualified. But it's unclear since they are paid as a plan at the beginning of the year.

I've already viewed publications 502 and 969 from the IRS. From those sites, only supplemental or medigap plans are not permitted with HSA after 65. But again, I'm not talking insurance plans. There is no mention or reference anywhere to Prepaid Plans.

Clarification: Can I use my HSA to pay for a PrePaid Dental Plan? I am 65 and on Medicare also.

[Bsch4477]

Payments for a dental discount plan are not a deductible medical expense.

[gleb001]

I appreciate the reply. Can you validate that answer for me. Where does it specifically say it is not? I would like to know the reason as to why specifically it isn't or is, and where I can reference it.

[xmasbaby0]

https://ttlc.intuit.com/questions/2895189-what-kinds-of-medical-expenses-are-deductible

https://www.irs.gov/publications/p502

[gleb001]

Maybe I posted this in the wrong topic. Not worried about trying to itemize medical deductions. I wish to know if I can pay for a PrePaid Dental Plan with my HSA. I've read publication 502 as to what is a qualified or excluded expense and it says nothing about prepaid plans for qualified expenses. As for Publication 969 as to what can be paid for with an HSA, there is nothing referencing PrePaid Plans for qualified expenses. All this plan does is prepay for the qualified services for the year and I get a discount for doing so.

Can you give any clarification on this?

[Bsch4477]

An HSA can pay for qualified medical expenses.  The cost of your dental plan are not qualified medical expenses.

[gleb001]

Well, once again, is there anything specific saying it's not qualified? From Pub. 502 as Qualifying Medical Expenses:

Dental Treatment

You can include in medical expenses the amounts you pay for the prevention and alleviation of dental disease. Preventive treatment includes the services of a dental hygienist or dentist for such procedures as teeth cleaning, the application of sealants, and fluoride treatments to prevent tooth decay. Treatment to alleviate dental disease includes services of a dentist for procedures such as X-rays, fillings, braces, extractions, dentures, and other dental ailments. But see Teeth Whitening under What Expenses Aren't Includible, later.

Now, my point is that the Dental Plan I'm paying for is for the exact procedures listed here. It's just paying for all upfront for a year. But you say that the plan isn't covered. I'm just trying to understand as to why you are saying it isn't. It doesn't make sense that I can pay for them separately and pay more as oppose to paying for them upfront for a discounted price.

As to why you say it isn't, I can't find anything specific that says it isn't.

In Addition: a quote from another article from HSA for america: 

Prepaid dental plans are another way to help reduce your dental expenses.  These plans charge a small monthly fee (typically around $7/month for individuals, or $16/month for families), and subsequently provide significant discounts for check-ups, fillings, extractions, and other services, as long as you go to a network dentist.  Some plans also help towards the cost of glasses or contact lenses.  Because these plans are not considered to be insurance, they can also be paid for from your HSA.

So when keeping track of your eligible medical expenses that can be reimbursed from your HSA, remember to include dental fees and the premiums you pay for a prepaid dental plan.

https://www.hsaforamerica.com/newsletter-issue-1.htm

Maybe he is wrong. I'm just looking for confirmation one way or another.

[gleb001]

Deleted as previous reply was added back.

[gleb001]

Content deleted as a previous reply was added back.

[dmertz]

If it's payment up front of a set fee for a specified course of treatment (for, say, cleaning twice a year and bitewing x-rays once a year or for something like a full course of orthodontia) and does not provide for discounted rates for services not included in the specified course of treatment, I would consider it to be the cost of that specific course of medical treatment and to be a qualified medical expense.   If it's payment for a plan that permits you to pay a discounted rate for services that are not explicitly part of specified course of treatment (with some services perhaps discounted to $0), I would consider it not to be a qualified medical expense since it's a payment to receive discounted rates, not payment for medical service.

[gleb001]

Thanks for a detailed answer dmertz.

The plan is specific to my dentist. It covers the normal course of treatment for a year which includes specifically 2 exams, 2 teeth cleanings, full X-rays yearly, and 2 fluoride treatments. The $300 cost only includes these services as part of the plan, but paying up front gives me about $30 off as oppose to if I would just pay as I go. And I have to pay the full $300 upfront.

Also by joining the plan, if I need additional services like bite adjustments, fillings, etc., I will only get a discount of 15% off the full price of the service if I pay the full amount when service is rendered. There are no payment plans or services offered at 0 costs, or even highly reduced cost.

This is what it includes specifically:

So to your reply, yes it's payment upfront for a specific course of services considered as normal preventative dental care. Anything outside of the specified services are billed separately.

[dmertz]

In general, I believe that the cost of this the "membership" is not a qualified medical expense.  The 15% off additional services, no-cost for x-rays needed for reasons other than normal course of preventive care and the reference to this being a"membership" means that you are paying to receive discounted prices, not to receive a specific treatment.

If your dentist provides a breakdown of the portion that is payment for the cost of the regular preventive care and the portion that is not, you might be able to treat the portion for regular preventive care as a qualified medical expense.

[gleb001]

You may be right, but the X-rays are only the 1 set allowed per year and are part of the cost. The 15% off other services is just a perk to being a member and those additional services must be paid in full outside of this prepaid plan.

In reality, the 1st 5 services listed is what the $300 is for. Anything extra is billed separately. 

And I'm not sure what the bill will actually read as for breakdown. But the fact remains that every service included in the plan is for qualified dental expenses. If I were to get each thing listed separately on a bill, each service would qualify for HSA expenses. Another part of the plan's fine print specifically says that discounts won't apply to cosmetic dentistry such as teeth whitening, which aren't qualified expenses for HSA.

Yes, a lot of gray area. I appreciate your response. I hope for other opinions on this as well.