Like most parents who have had to pay for braces for their child’s teeth, I cringed when I heard the first quote for the work. In fact, I cringed when I heard each quote! Before we even got any estimates for braces, however, we started looking for ways to save money paying for our child’s orthodontics and we did find a few.
Check What Your Dental Plan/s Will Pay for Orthodontic Treatment
I griped at great length earlier about how my husband’s dental plan provides only very limited coverage for orthodontic work for dependant children. Still, at least we recouped most of the money we have paid and will be paying in premiums. So we saved money not because our costs were reimbursed but because we had to pay the premiums anyway and at least this way we got our own money back. A dubious win.
If your child is listed as a dependent under more than one dental plan, be sure to check the details of each plan. It may be possible to get some coverage from each plan.
Don’t buy into a dental plan just to get orthodontic coverage without checking out every detail! You don’t want to pay more in premiums than you will receive back in reimbursement.
Use a Health Spending Account, HSA to Pay for Braces If You Can
Some employers offer their staff a benefit called a Health Spending Account. The money in the account is used to pay for medical expenses.
Each of these plans has its own rules and restrictions so you’d have to ask for details from your company’s benefits’ department.
In our case, my husband can have an HSA provided he puts the money into it. The employer doesn’t contribute anything. It’s still valuable, though, because he puts in before-tax dollars. And in his tax bracket, that’s a substantial saving.
There’s a cap on how much he can put in his HSA and there’s some tricks where they can seize all of the money if it doesn’t get spent after 2 years.
Still, this enabled us to pay for much of the required work with pre-tax dollars, which meant a substantial saving. (I’m still waiting to see, though, if any of this turns out to be a taxable benefit. If it does, it will negate the value of the plan, though, so I’m hoping it isn’t.)
Claim the Costs of Orthodontic Work on Your Income Tax Return
First of all, orthodontic work cannot be claimed on your income tax return as a medical expense if it is done only for cosmetic reasons. The work must be medically necessary. Talk to your dentist and orthodontist about this if it’s not clear.
Whether you can save much money by reducing the income tax you have to pay will vary greatly depending on your annual income and on your combined medical expenses. You can see an example of how to claim the expenses on the CRA website.
If you have a high annual income, and no other medical expenses, you may not get to claim very much of the cost of braces on your tax return in April. For example, if your orthodontic expense for the year was $3500, and you had $1500 reimbursed by your dental plan and nothing reimbursed by a HSA, then you only have $2000 left that you can claim.
- If your net income is over $71 734 then you have to subtract $2152 from your medical expenses (for the 2013 taxation year) leaving you with nothing to claim.
- If your net income is lower, the amount you subtract is also lower than $2152 and you will get to claim some of the expense.
There are some tricks to claiming medical expenses. For example, they don’t have to be for the January to December period for which you are reporting your taxable income. Please read the details on the CRA website to see if you can increase your expenses by shifting the reporting period a few months one way or the other.
Pay in Advance
Many orthodontists offer a discount if you pay the entire treatment plan amount before beginning treatment. It saves them the hassle of wondering if your cheques will bounce and, of course, they get to use your money sooner.
Our orthodontist offered 5% off the bill if we paid in a lump sum. So we did.
If Possible Get Credit Card Rewards For Paying for Orthodontistry
If and when you do pay, try to maximize any benefits you can get for the actual payment.
Our orthodontist takes all of the major credit cards; it may be worth checking what payment terms your orthodontist offers before making the final decision about who to pick.
We don’t have a cash-back credit card but we do have a card that gives Petro-Points. So we now have enough Petro-Points to get another Best Buy eCertificate in time for the Boxing Day sale, should we want one. Or we could get another free year’s basic membership at CAA for one of ourselves or our relatives.
Save the Money Before You Need It to Avoid Paying Interest On a Loan
This one should be obvious but….
If you have to get a loan to pay for braces for your child, you are going to have to pay interest as well as the actual cost of the dental work. When I was paying for my child’s work, the clerk even asked me if I was going to be using my HELOC to pay because she knew others were.
Ouch: Giving up equity in your home just to have your child’s teeth straightened?! Not for me, thanks.
If I couldn’t afford to pay to have the work done, then unless my child was actually in dental distress because of the alignment of his or her teeth, I would not get the work done.
Admittedly, though, it’s easy to say that. It might have been much harder if I’d actually had to do that. Good thing we saved.
- How Much Should You Budget to Save for Your Child’s Orthodontic Work? What Do Braces Cost?
- Are We Losing Money On Our Dental Plan Because of Orthodontic Coverage for Our Children?
Did you use some other strategies to reduce the costs of orthodontic work? Please share your insights with a comment.