Using HSA and FSA for LASIK in Colombia

LASIK Is HSA/FSA Eligible

The IRS explicitly lists LASIK as a qualified medical expense. Under IRS Publication 502, eye surgery to correct defective vision (including LASIK, PRK, and similar procedures) is deductible. This means you can pay for it using:

• Health Savings Account (HSA)
• Flexible Spending Account (FSA)
• Health Reimbursement Arrangement (HRA)

The location where surgery is performed doesn't matter to the IRS. As long as the procedure is performed by a licensed medical professional and is for a qualified medical purpose, it's eligible.

How Much You'll Save

Paying with pre-tax dollars effectively gives you an additional discount equal to your marginal tax rate. Here's an example:

Combined with Colombia's already 60-70% lower prices, you could pay as little as $1,100-$1,200 for a procedure that costs $5,000+ in the US.

HSA vs FSA: Key Differences

Health Savings Account (HSA)

• Requirements: Must have a high-deductible health plan (HDHP)
• Rollover: Funds roll over year to year (never expire)
• 2024 limits: $4,150 individual, $8,300 family
• Investment: Can invest funds for tax-free growth
• Best for: Long-term savings; plan ahead for LASIK

Flexible Spending Account (FSA)

• Requirements: Offered through your employer
• Rollover: Use it or lose it (some plans allow $610 rollover or 2.5-month grace period)
• 2024 limits: $3,200
• Best for: Using excess funds before year-end

What Expenses Are Covered?

For LASIK medical tourism, these expenses are typically HSA/FSA eligible:

Important: Only the medical procedure and directly related medical expenses are eligible. Travel, lodging, and meals are NOT covered (though they may be tax-deductible separately if you itemize — consult a tax professional).

How to Pay with HSA/FSA

Option 1: Pay Directly with HSA/FSA Card

If your HSA or FSA provides a debit card, you may be able to pay the clinic directly. However, some Colombian clinics may not accept US-issued cards. Check with your clinic beforehand.

Option 2: Pay Out of Pocket, Then Reimburse

The more common approach:

1. Pay for LASIK with a personal credit card or cash
2. Obtain detailed receipt showing:
   • Provider name and credentials
   • Procedure performed (LASIK, PRK, etc.)
   • Date of service
   • Amount paid in USD
3. Submit reimbursement request to your HSA/FSA administrator
4. Receive tax-free reimbursement

Documentation You'll Need

Keep the following for your records:

• Itemized receipt from the clinic (request in English if possible)
• Proof of payment (credit card statement, wire transfer confirmation)
• Medical records documenting the procedure
• Currency conversion documentation if paid in Colombian pesos

Most Colombian clinics serving international patients are familiar with providing documentation suitable for US insurance and tax purposes.

FSA Year-End Strategy

If you have FSA funds expiring at year-end, LASIK is an excellent way to use them. Planning tips:

• Q4 timing: Schedule your Colombia trip in October-November to use expiring funds
• Know your deadline: Some FSAs have a 2.5-month grace period into the new year
• Check rollover rules: Your plan may allow $610 rollover — factor this into calculations
• Don't rush: Schedule surgery when it works for you, not just to use funds

Total Savings Example

Consult a Tax Professional

While LASIK is clearly HSA/FSA eligible, everyone's tax situation is different. For specific advice about:

• Your HSA/FSA contribution strategy
• Deducting medical travel expenses
• Documentation requirements for international procedures

Consult with a qualified tax professional or CPA.