Many people have the option of contributing to a Health Savings Account or healthcare Flexible Savings Account through their employer where they also have health insurance. The contributions to these accounts is tax advantaged as they are contributed pre-tax and any amounts you don’t use are rolled over from year to year. A smart way to make the most of those savings is through medical tourism since you are paying with tax advantaged funds.

From IRS publication 502 the definition of medical expenses is stated as:

Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes.

In addition to the payments listed above, publication 502 also states (emphasis ours):

Medical expenses include the premiums you pay for insurance that covers the expenses of medical care, and the amounts you pay for transportation to get medical care.

Hence, those medical procedures for which you know you will have limited or no coverage can be funded via your healthcare flexible spending account, including the cost of transportation for a medical tourism trip. So on top of the lower costs you will already enjoy by traveling abroad for treatment you can save even more by paying for it with the tax advantaged funds in you health savings account.

This entry was posted on Thursday, September 15th, 2011 at 9:12 pm and is filed under Insurance. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.