Paying for orthodontic treatment–what are the main financial resources?
There are generally four financial resources for orthodontic treatment:
- Insurance
- Employer-sponsored pre-tax plans such as Flexible Spending Accounts and Health Savings Accounts
- Out-of-pocket funds
- Third party financing
Financial strategies for optimizing your purchasing power
Insurance Orthodontic insurance typically pays 50% of incurred charges up to a lifetime maximum, commonly in the neighborhood of $2000.00. Orthodontic coverage is not an automatic feature of dental insurance; it is often tacked on as an option or “rider”. It is sometimes limited to minors only, but thankfully this dated limitation is rarely seen these days. The most obvious and powerful way to optimize insurance benefits for kids is to avoid excessive or ultimately redundant treatment in interceptive or Phase I orthodontic treatment. This is the treatment that’s done before the child has all of his or her permanent teeth, and is usually followed by Phase 2 treatment, or full braces. Phase 1 treatment is often very beneficial, but it should be done only to satisfy compelling needs in order to take advantage of a limited window of opportunity. Treatment philosophy and ethical considerations come into play here. Another powerful tool is to tap dental and medical insurance for some coverage, and a significant amount of savvy and effort on the part of the practice’s financial coordinator is often required.
Employer-Sponsored Pre-Tax Plans: We are often surprised by the number of folks who don’t take advantage of these plans, but most often it’s because the employee isn’t aware that they exist. These plans allow you to fund accounts with pre-tax dollars, so you are in effect saving at the percentage of your top marginal tax rate. The downside of Flexible Spending Accounts is that you lose the unused portion at the end of the year. Health Savings Accounts tend to not have that ridiculous feature, allowing you to build a bit of a health expense nest egg. The key to optimizing this benefit is planning, as the annual enrollment period tends to be in November of the preceding year. We offer creative structuring of treatment financial agreements in order to optimize the tax-savings feature of these plans. If your employer offers these types of plans, your HR or benefits department can supply you with information and help in getting your account set-up.
Out-Of-Pocket Funds: The least convenient way in which to handle the out-of-pocket portion of the treatment fee is to make periodic payments with a credit or ATM card, or check. We offer convenient automated payment plans via your credit card or bank account. These plans are limited to a specific number of monthly payments of a designated amount. Incidental fees can be added on with proper notice, if you like. These plans save you the hassle of remember to make payments, and as an added benefit they avoid potential late fees.
Third Party Financing: We offer no-interest payment plans, so we don’t see the need for anyone to incur the additional expense of third party financing. This type of financial option can come into play for larger one-time expenses, such as corrective jaw surgery.
The good news is that you can relax–we at Schur Orthodontics are here to help you maximize your benefits!