Can You Pay For Mental Health Expenses With An FSA Or HSA?
Finding the right psychologist or therapist is not as easy as the right dentist. Usually you have to put in some work –feel out the advisor to see if their methods actually suit your needs.
But once you have found a partner with whom you would like to work, the question of payment inevitably arises, which usually entails many logistical questions: Does the therapist accept insurance? If so, are you on the network? If you are paying out of pocket, can you afford it?
Since health care is what it is in the US (a for-profit hellscape), there is a workaround to pay for mental health care that many people fail to take advantage of: flexible spending or health savings accounts.
What are FSAs and HSAs?
The Flexible Spending Account and the Health Savings Account are similar financial instruments, with a few exceptions and caveats.
Health Savings Accounts (HSA) are options that are included in virtually all major health insurers with high deductibles. If you’ve signed up for a workplace-based health plan, you can pre-tax a portion of your paycheck into one of these accounts and use those funds to pay for deductibles, co-payments, and other medical expenses. (If you don’t have work-related health insurance, you can still put money into your HSA but without the pre-tax luxury.) This means that an HSA is essentially a rainy day fund to pay for physical and mental health expenses – and the money stays with you even if your plan is terminated or you quit the job.
An FSA, on the other hand, covers the same costs, but is only guaranteed by a specific employer. Unfortunately, FSA funds will expire after a year if left unused by a certain date, and you typically only have a specific window of time to make claims for expenses incurred in the previous year. Check with your employer to see if you can transfer unused portions of your FSA—You can usually transfer up to $ 500.
Contrary to the usually bureaucratic and thorny process of paying healthcare in general, FSAs and HSAs are quick and actionable. Typically, the money you’ve deposited can even be accessed with a special debit card (but you can also submit the expenses incurred to your plan’s administrator for reimbursement).
The health resource Choose therapy breaks down further details of the Flex account:
With an HSA, every penny you deposit into the account (up to the contribution limit) remains yours until you spend it on qualifying healthcare. Your HSA savings can be invested similarly to 401 (k) savings and grow tax free. If you ultimately need to withdraw funds to cover medical or mental health expenses, those funds will go untaxed.
You can use money from your HSA on therapy visits, hospital stays, and more. That makes it a helpful resource for people grappling with payment options for mental and behavioral health care
Both HSAs and FSAs have contribution limits, each of which was expanded in 2020. This year, “Individuals can contribute up to $ 3,550 to their HSA and couples and families can contribute up to $ 7,100,” says Choosing Therapy, while “Employees can contribute $ 2,750.” Health FSAs ”, so Hold people.
How to Use HSA or FSA to Pay for Psychiatric Care
It’s very easy, at least when it comes to swiping the card. Since your account can be assessed using a special debit card from your employer or your health insurance company, you only have to provide the biller with the card number when paying for your visit – in whole or in the form of an additional payment. If you would like to be reimbursed for previous benefits or co-payments, you can ask your therapist or counselor for a receipt and mail it to your account provider as your plan requires.
But then it gets cloudy. It’s important to remember that your HSA / FSA is not giving you the option to pay for your psychiatric treatment as you see fit. So you have to deal with some red tape first. The HSA / FSA models are great when it comes to paying for regular doctor visits and even drugs prescribed by a psychiatrist, but paying for talk therapy may require a referral from your GP.
The health experts Explain Connect Your Care:
Treatment by a psychologist or psychiatrist is reimbursable by the FSA or HSA when the purpose of treatment is for medical care and not for general mental health improvement. Because of this, things like marriage counseling or couples therapy are not eligible for FSA and HSA coverage.
As a general rule, talk therapy and psychiatric care are likely to be “appropriate” for HSA / FSA, but it is necessary to speak with your health care provider or human resources department to understand how to address the situation first.