Can I use a Lifestyle Spending Account (LSA) for dental care products? (Updated for 2025)

You might be wondering if you can use your Lifestyle Spending Account (LSA) for dental care products.

LSAs are a relatively new type of employee benefit that are becoming increasingly popular among employers looking to support their employees' overall well-being.

In this article, we'll explore what LSAs are and whether they can be used for dental care products.

What is a Lifestyle Spending Account (LSA)?

A Lifestyle Spending Account (LSA) is an employer-funded benefit that allows employees to spend money on a wide range of wellness expenses. These expenses can include things like gym memberships, fitness classes, mental health services, and even home office equipment.

Unlike traditional employee benefits like health insurance or retirement plans, LSAs are taxable benefits. This means that any money an employee spends through their LSA is considered taxable income.

However, this also gives employers a lot of flexibility in how they design their LSA plans. They can choose which expenses are eligible, set spending limits, and decide how often to fund the accounts.

What Dental Care Products are Eligible for LSA Reimbursement?

Most LSAs exclude dental care products like toothpaste, toothbrushes, and floss. These items are typically classified as "general health" expenses rather than specialized benefits.

Employers may choose to include dental products in their LSA, but this is uncommon. For example, HealthPartners' LSA covers fitness and wellness expenses but does not mention dental care.

A 2025 bill (the Oral Health Products Inclusion Act) proposes allowing FSAs/HSAs to cover over-the-counter oral care items (toothpaste, floss, etc.). This does not apply to LSAs, as they operate under separate rules.

For now, LSAs are not a reliable avenue for dental care product reimbursement unless explicitly stated in your employer's plan. Check with your employer to see if they include dental products, and monitor legislative updates, but keep in mind that the pending bill only affects FSAs/HSAs, not LSAs.

How Do LSAs Differ from FSAs and HSAs for Dental Care Products?

While Lifestyle Spending Accounts (LSAs), Flexible Spending Accounts (FSAs), and Health Savings Accounts (HSAs) all offer ways to save on health-related expenses, they differ in their tax status, employer control, and eligibility for dental care products.

Tax Status

LSAs use post-tax dollars, meaning that any money you spend through your LSA is considered taxable income. In contrast, FSAs and HSAs allow you to set aside pre-tax dollars for eligible medical expenses, which can result in significant tax savings.

Employer Control

Employers have full control over the design of their LSA plans, including which expenses are eligible, spending limits, and funding frequency. FSAs and HSAs, on the other hand, are regulated by the IRS and have specific rules around eligibility, contribution limits, and qualifying expenses.

Dental Product Eligibility

Currently, dental care products like toothpaste, toothbrushes, and floss are rarely covered by LSAs. Employers may choose to include them, but it's not common practice. Similarly, FSAs and HSAs do not typically cover these items, as they are considered general health expenses rather than medical necessities.

However, there is pending legislation (the Oral Health Products Inclusion Act) that proposes allowing FSAs and HSAs to cover over-the-counter oral care products starting in 2025. This bill does not apply to LSAs, which operate under separate rules set by employers.

If you're unsure whether your employer's LSA covers dental care products, it's best to check with your HR department or benefits provider. They can provide specific information about your plan's eligible expenses and any upcoming changes based on legislative updates.

What are the Pros and Cons of Using an LSA for Dental Care Products?

While LSAs offer flexibility and customization, there are both advantages and drawbacks to consider when it comes to using them for dental care products.

Pros

• Tailored benefits: Employers have the power to include dental products in their LSA plans if they believe it aligns with their overall benefits strategy and employee well-being goals.
• Employee choice: If dental products are included in an LSA, you have the freedom to choose the specific items that best suit your needs and preferences.
• Potential cost savings: Depending on your employer's LSA plan, you may be able to save money on dental care products that you would otherwise purchase out-of-pocket.

Cons

• Limited eligibility: Currently, most LSAs exclude general dental care products like toothpaste, toothbrushes, and floss, as they are considered general health expenses rather than specialized benefits.
• Misuse of funds: The lack of strict oversight and regulations for LSAs may lead to some employees misusing the funds for non-essential or unintended purchases.
• Tax implications: Since LSAs are funded with post-tax dollars, any money you spend through your LSA is considered taxable income, which may diminish the appeal and overall savings for you as an employee.
• Confusion and complexity: With varying rules and eligibility across different employers' LSA plans, understanding what is covered and how to utilize the funds effectively can be challenging for you as an employee.

Are LSAs a Reliable Way to Save on Dental Care Products?

While LSAs offer flexibility and customization for employee benefits, they may not be the most reliable option for saving on dental care products. Most LSAs currently exclude general dental items like toothpaste, toothbrushes, and floss, as they are considered general health expenses rather than specialized benefits.

However, it's important to check with your employer to see if dental products are covered in your specific LSA. Some employers may choose to include these items if they believe it aligns with their overall benefits strategy and employee well-being goals.

It's also worth monitoring legislative updates, as the pending Oral Health Products Inclusion Act could expand FSA and HSA eligibility for oral care items starting in 2025. However, this bill does not directly impact LSAs, which operate under separate rules set by employers. LSAs will remain unaffected unless employers proactively adjust their policies to include dental care products.

If you're interested in learning more about LSAs and how they work, you can explore what a Lifestyle Spending Account (LSA) is and how it differs from other employee benefits. You may also want to explore LSA options available to employers to better understand the potential benefits and limitations of these accounts.

Ultimately, while LSAs can be a valuable addition to an employee benefits package, they may not be the most reliable way to save on dental care products unless your employer specifically includes these items in their plan. It's important to communicate with your HR department or benefits provider to understand what is covered under your specific LSA and to explore other options for saving on dental care expenses, such as FSAs or HSAs, if eligible.

Forma helps employers design flexible Lifestyle Spending Accounts (LSAs) that align with their employees’ wellness needs. If you’re unsure whether your LSA covers dental care products or want to explore more customizable benefits, Forma provides expert guidance and tailored solutions. Schedule a consultation with one of our experts today.