Dental braces are a bit like a home renovation project, but for your teeth. For some, it addresses a structural issue, such as misaligned jaws or teeth. For others, it’s a cosmetic touch-up to make your smile shine even brighter. And it’s not just for teenagers, according to the American Association of Orthodontists, one in three clients these days is over the age of 18.

Straight teeth and aligned jaws come at a price. The cost of braces varies according to the type of braces you opt for, and the time needed to bring your teeth in line. The all-in cost, which typically can be spread out over the course of a multi-year treatment might run from $3,000 to as much as $10,000.

Orthodontia is a serious financial commitment. Many health insurance plans don’t include dental coverage, or require a separate dental policy that may or may not include orthodontia. Even if you have dental insurance that covers orthodontia, it typically will only cover 50% or so your bill, with a lifetime maximum braces benefit that might be just $1,500 or so.

The HSA solution to paying for braces

If you have a high deductible health insurance plan (HDHP) you may be able to reduce your total out-of-pocket braces cost by 20% to 30%, or more.

With most HDHPs you become eligible to contribute to a health savings account (HSA). The money you contribute to an HSA is tax-deductible. Every dollar you contribute reduces your taxable income for that year. For instance, if your income is $70,000 and you contribute $5,000 to your HSA, your taxable income for the year drops to $65,000. (Learn more about annual HSA contribution limits)

Money in your HSA can then be used tax-free to pay for your braces. Orthodontia is considered a “qualified medical expense” that allows you to withdraw money from your HSA without owing federal or state income tax.

By being able to use tax-free dollars that you also received a tax deduction on, you are effectively reducing the cost of paying for braces. For instance, if you happen to be in the 22% federal income tax bracket, using HSA dollars to pay for braces is essentially like saving 22% on the cost. In higher tax brackets, the tax break will be worth even more.

Another benefit of using an HSA to pay for braces is that you can save over time to cover the cost. Money you contribute to an HSA in a given year does not need to be used immediately. You can save it for future expenses in any year. If you anticipate a young child needing braces in a few years, you can start setting aside money in your HSA today with the intent that you will be able to use those tax-free dollars to help pay for the treatment when they are older.