The good news is that you can pay for many mental health treatments and services (including some forms of online therapy) with your flexible spending account (FSA) or your health savings account (HSA), to offset out-of-pocket costs. Most mental health needs can be paid for with HSA funds, including therapy appointments and medications. However, there are some restrictions on what you can use your HSA for if you want it to remain a qualifying expense and avoid paying spending taxes or paying a 20% penalty. The COVID-19 pandemic has had a significant impact on mental health.
Physical health challenges and social distancing have been difficult for people of all ages. Many are now seeking attention and support, often for the first time or after many years. While it may not be obvious, the Health Savings Account (HSA) can play a vital role in that process. With its unique tax benefits1 and ease of use, HSA is an excellent complement to your other mental health resources.
If you see a therapist or receive mental health counseling, you may be able to pay the bill with your HSA funds. Regular exercise can also increase confidence and provide greater social interaction, although be sure to eliminate risks related to COVID-19 first. These expenses are eligible for FSA or HSA only if they are for health care purposes. Therapy or counseling that is used for general mental health improvement without a medical diagnosis (such as marriage counseling) is not eligible.
The good news is that mental health therapy, including virtual appointments, is an HSA-eligible expense. You can use your account to cover the cost of your sessions or receive a refund. Counseling is eligible for HSA and includes appointments with psychologists, psychiatrists, licensed social workers, and other mental health professionals. If your insurance doesn't cover mental health or you don't pay it 100%, you can use your HSA funds to cover the rest.
Your doctor or provider should be able to accept your HSA card without issuing it, but it's good to call ahead and ask. If you look at what types of costs HSA covers, you'll notice that they do cover doctor's office visits by patients. However, when it comes to online therapy, there are very few costs to take advantage of or access the service. This makes it even more difficult to obtain benefits due to the low-cost services of online therapy platforms.
As long as the therapy is provided by a licensed professional, then yes, you could use HSA funds to cover it. Today, most HSA providers have an online form for account holders to submit HSA mental health and therapy expenses.