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Flex Spending

ACCOUNTS THAT ACCOMMODATE

Myth: Bariatric surgery is not affordable.

Fact: Bariatric surgery is tax deductible making it more accessible to cash paying and high deductible insurance plan patients.

According to the official IRS rules, patients are permitted to deduct medical expenses as long as the fees are higher than 7.5% of the adjusted gross income.

In the US, tax appropriations decrease medical expenses for the non-elderly by over $208 billion each year.

In order to take advantage of the reduced costs, patients need to fill out the IRS 1040 Form, Section A. It will be important to retain medical bills and proofs of payments for full disclosure. Note that any reimbursed amount, such as the amount insurance has covered cannot be included when filling out the form.

There are several finance options to consider. Money accrued in special medical savings accounts, or even in an Individual Retirement Account (IRA) could help to finance bariatric surgery.

Financing may also be available through the following tax-favored accounts:

1. The FSA (Flexible Spending Account) – Large Employer Only (50+ employees) – FSAs are flexible in that both employers and employees can contribute money to them. FSAs can be offered together with any health plan. Tax-free withdrawals are available as long as they are used to pay for qualified medical expenses. Click here to see the IRS website for more information.

2. The HSA (Health Savings Account) – Individual, Small Business, or Large Employer (50+ employees) – HSAs can only be opened in conjunction with a qualifying health plan that has a high deductible. This type of account yields the greatest amount of tax deductions. Click here for more information.

3. The Archer MSA (Archer Medical Savings Account) – Small Business – Archer MSAs are very similar to HSAs, except they are specifically designed for self-employed individuals or small businesses. Click here for more information.

4. The HRA (Health Reimbursement Account) – Large Employer Only (50+ employees) – Your employer is the only one who can offer and contribute money to HRAs. If your company offers an HRA, check to see if the plan covers ALL qualified medical expenses. Financing bariatric surgery is not prohibited with some HRA plans, therefore it’s wise to know exactly what it entails. Click here to get the summary from the IRS.