Module 3.6 – HSA and FSA
You may have patients who want to pay with a Health Savings Account (HSA) and Flexible Spending Account (FSA). There are some things you should know about billing to HSA and FSA accounts.
1. What are HSA and FSA accounts?
- Health Savings Account (HSA) is a savings account that allows you to make tax-free and tax-deductible contributions toward qualified medical expenses, up to a certain amount. Patient/responsible party is the account holder. The funds may be rolled over and are portable, so the patient can take them if they part from their employer. It is important to know that if it is determined that the HSA account was not used for a qualified expense, an additional tax of approximately 20% may be levied on that amount. To be able to have a HSA account, you must meet the following criteria: (1) Not be claimed as a dependent on anyone else’s tax return; (2) not enrolled in Medicare; and (3) covered under a high deductible health plan (HDHP).
- Flexible Spending Account (FSA) is a tool where your employer allows you to stow away tax-free contributions, up to a certain amount. FSA accounts are owned by the patient/responsible party’s employer. Most FSA plans are “use it or lose it,” but some may allow for a rollover or extended grace period. The “use it or lose it” rule may also apply for job changes, so if you don’t use your benefits before switching jobs, you could lose your FSA benefits.
2. Can orofacial myologists bill to HSA or FSA accounts?
Yes. Orofacial myologists can bill to HSA or FSA accounts; however, there is always a possibility that the the services you are providing (or the items you are selling) will be kicked back as non-qualified medical expense. To support your services being considered as a qualified medical expense, you will want to provide the patient/responsible party with appropriate documentation that contains the following: the patient’s name, provider’s name, date of service, type of service, and cost. There could be a tax imposed on funds that are not used for qualified medical expenses.
- If you are using Square as your credit card processor, you can bill to HSA or FSA cards as long as your business category selected is “Medical Practitioner, Medical Services, or Dentistry.” You can change your business category by contacting Square at the following link: https://squareup.com/help/us/en/contact?panel=C87253DC99C5
Note: You have the option to use Square as your payment provider if your practice is located in the United States or Canada.
- PracticeQ Payments is IntakeQ’s own credit card processing system. You can use PracticeQ Payments for billing to HSA and FSA accounts. Per the company, “HSA and FSA cards are accepted as long as they are issued by one of the major credit card brands.”
Note: You have the option to use PracticeQ Payments as your payment provider if your practice is located in the United States.
- Stripe is another common credit card processor that allows for billing to HSA and FSA accounts. You will want your business to have a special classification (called a “MCC”). You’ll want to call Stripe to ensure that your business is classified appropriately. https://support.stripe.com/questions/process-health-savings-account-(hsa)-or-flexible-spending-account-(fsa)-cards
Note: You have the option to use Stripe as your payment provider if your practice is located in the Canada and any country outside of the United States.
3. What is a qualified Medical and dental expense?
View a full list of qualified medical or dental expenses at this link: https://www.irs.gov/pub/irs-pdf/p502.pdf
4. How do I process payments to HSA or FSA accounts?
Most patients will have HSA or FSA cards, which can be billed in the same manner as a typical credit card. Some patients may opt to write a check from their account.