Using Pre-Tax Dollars for Hearing Health

If you have employer-sponsored health coverage, you may have access to a Flexible Spending Account (FSA). If you are enrolled in a qualifying High Deductible Health Plan (HDHP), you may be able to contribute to a Health Savings Account (HSA). These accounts let you set aside money before taxes to pay for certain medical expenses.

Using pre-tax dollars can reduce the after-tax cost of hearing care, but the amount depends on your situation (for example, your federal tax bracket, payroll taxes, and your state’s tax rules). State income taxes may differ, and some states do not treat HSAs the same way as federal rules.

What may be eligible?

Eligibility can depend on the item and your plan’s rules. Examples that are often eligible include:

• Hearing aids: Including prescription hearing aids and (in many cases) FDA-regulated Over-the-Counter (OTC) hearing aids.
• Power and upkeep needed to operate hearing aids: Batteries, and repairs/maintenance needed to keep the devices working.
• Hearing care visits and tests: Clinic visits and diagnostic testing are commonly treated as medical expenses; copays and deductibles for eligible services are often payable with FSA/HSA funds.
• Supplies related to device care: Some hearing aid supplies (for example, parts or consumables used to keep devices functioning) may qualify, but plan rules vary.

FSA vs. HSA: knowing the difference

Both accounts can offer tax advantages, but the rules are different. Not every workplace offers both options, and “plan year” dates can vary (many plans use a calendar year, but not all do).

Planning tips (neutral, “check first”)

If you have an FSA

If your FSA has a “use it or lose it” rule, you may want to review your balance before your plan year ends. Some people use remaining funds for eligible hearing-related expenses they already expect to need (for example, device upkeep or clinic copays), but eligibility can vary.

Timing across plan years: proceed cautiously

Some people consider timing hearing aid purchases around a plan year boundary. However, FSAs generally reimburse only expenses that are incurred during the period you are covered by the plan, and details like delivery date, service date, and how a deposit is applied can matter.

If you are considering a strategy that spans two plan years (for example, a deposit in one year and remaining balance the next), it is usually safest to confirm details with both your plan administrator and your clinic’s billing team before relying on it.

Handling “bundled” or denied claims (what the codes may mean)

Billing statements and Explanations of Benefits (EOBs) may include standardized adjustment and denial codes. These codes can help explain why an insurer paid (or didn’t pay) a line item, but the practical impact depends on your plan and your provider’s contract.

One example is CARC 97, which indicates the insurer considers the benefit for that service included in the allowance for another service or procedure. You may also see group codes such as:

• CO (Contractual Obligations): often used for amounts not billable to the patient under the insurer-provider contract (rules can vary).
• PR (Patient Responsibility): commonly used for patient cost-sharing amounts (for example, deductible or copay) when applicable.

If you receive a bill after an insurance denial or adjustment, you can ask your provider’s billing office to clarify whether the amount is patient responsibility and whether it may be eligible for FSA/HSA payment. If it is a qualified medical expense, paying with pre-tax funds may help reduce your after-tax cost.