How To Get HSA Therapy Reimbursement
Mental health conditions such as anxiety and depression can be challenging to live with, and while therapy can help, many individuals may be concerned about the cost of seeking mental health services. Still, the cost of getting professional help may be more manageable through the use of a Health Savings Account (HSA). By allowing you to use untaxed dollars for medical expenses, HSAs may offer a way to reduce a person’s overall healthcare costs.
These accounts have gained popularity in the United States; there were around 25 million HSAs as of 2018. An HSA can help you save on qualifying mental healthcare services, including therapy and psychiatric care. With an HSA, mental health resources may become more affordable for some people. This article will explain how HSAs work and how they may be used for qualifying therapy expenses.
How does a health savings account work?
An HSA can be a way to save money on medical costs, including physical and mental health care expenses. HSAs may be useful for people who have a high-deductible health insurance plan (HDHP).
When you put money into an HSA, you don't have to pay taxes on it. You also don't have to use the money in your HSA right away; it can be saved for future medical expenses. HSAs can help pay for medical expenses that health insurance or high-deductible health plans might not cover. The government decides which medical expenses qualify. According to the IRS, “you can include in medical expenses amounts you pay for therapy received as medical treatment”.
Comparing HSA and FSA
An HSA can be compared to another common medical savings account called a Flexible Spending Account (FSA). Both can be used to set aside pre-tax dollars for medical expenses, but there are key differences:
- HSA funds can roll over from year to year, whereas FSAs typically have a "use it or lose it" rule; unused funds are usually forfeited at the end of each plan year.
- HSAs are only available to those with a high-deductible health plan, whereas FSAs are typically offered through an employer and don't require a specific insurance plan.
- HSA contributions typically have higher annual limits than FSAs, allowing individuals to save more money each year.
Can I use HSA with insurance?
Yes, you can use an HSA alongside health insurance. In fact, an HSA is usually meant to complement a high-deductible health plan (HDHP). While the HDHP provides coverage for larger medical expenses, the HSA can be used to pay for other costs not covered or reimbursed by the insurance plan such as deductibles, copayments, and coinsurance, for example. Your HSA account can also be used for qualifying medical expenses that may not be covered by insurance, including qualifying mental health care services.
HSA-eligible mental health services
Mental health therapy, when deemed as part of medical treatment, can be an HSA-eligible expense, allowing some individuals to use their HSA to cover the cost of treatments or be reimbursed. Below are some examples of mental health services that may be paid for using an HSA.
Mental health therapy
Some individuals may be able to use their HSA funds for a range of mental health treatments, including psychiatric care, sessions with a licensed therapist, or appointments with a psychologist. These treatments may be used for various mental health conditions such as anxiety, depression, or bipolar disorder, for example.
Psychiatric care
If you have a severe mental health condition, you might need to see a psychiatrist for a diagnosis, medication management, and therapy. Psychiatric care can also be an HSA-eligible expense, which may make it easier for you to get the professional help you need.
Complementary therapies
Sometimes, alternative treatments such as acupuncture may help with medical or mental health challenges. In these cases, you might be able to use your HSA funds to pay for them. This could give you more options for getting the help you need.
If you're ever audited or asked to prove that your therapy was needed for medical reasons, you might need a letter of medical necessity. This letter explains why you need the treatment and can be written by a healthcare provider.
Where to find out what services are HSA-eligible
To determine what would be considered qualified medical expenses under your HSA, you can use the following resources:
- IRS Publication 502: This document from the IRS gives a detailed list of medical expenses that can be covered by an HSA. It includes costs for diagnosing, treating, or preventing medical and mental health problems.
- HSA administration websites: You can also consult websites related to HSAs or your HSA provider's site. These websites often have information and lists of expenses that are HSA-eligible, including mental health services like therapy.
If you still have questions, you can ask your insurance provider or your employer's human resources (HR) department. You may also want to consult with a tax professional.
How to get an HSA therapy reimbursement
An HSA can be used to pay or reimburse certain qualifying medical expenses. HSA reimbursement refers to using funds from an HSA to reimburse qualified medical expenses that were originally paid for out of pocket. This can often occur when there were insufficient funds in the HSA to pay for the medical expense at the time of treatment.
To get reimbursed for therapy using an HSA, you may need to have a high-deductible health insurance plan and an active HSA, and the therapy may need to be considered medical treatment.
Here are a few tips to keep in mind for how to get an HSA therapy reimbursement:
- Get a detailed receipt for your therapy services. Ideally, this receipt will show the date, the provider's name, and the cost of the session. You might also want to get a Letter of Medical Necessity (LMN) from your healthcare provider. This can help show that the therapy was needed for medical purposes.
- Send a reimbursement request to the company that manages your HSA. They might have an online form you can use, or you may be asked to fill out a paper form. Attach the therapy receipt and LMN (if you have one) to the reimbursement form. Even though you don't need to send the LMN with your reimbursement form, it could be important to keep it. You might need it later for taxes or if you get audited.
- Keep track of your HSA reimbursements, and make sure you don't go over the yearly contribution limit.
It can be important to stay informed about HSA rules. Consider checking the IRS guidelines on eligibility and eligible expenses regularly since these rules might change over time.
Additional resources and support
If you’re considering using an HSA for therapy, you might be looking for more resources and support. Numerous options and organizations are available if you’re seeking mental health treatment covered under your HSA plan or other affordable treatment options.
For instance, BetterHelp offers affordable pricing options that may be comparable with the copays of many insurance plans. This platform can connect clients with online therapists who suit their needs and circumstances, and it can provide a way for people to receive therapy in a flexible, comfortable way from their own homes.
In some cases, you may be able to use HSA funds to pay for online therapy services, as long as the therapy is deemed medically necessary. Consider reaching out to your HSA administrator or the online therapy platform for information on proving medical necessity and whether the therapy might be eligible for reimbursement.
Research indicates that online therapy often results in similar outcomes as in-person therapy for common mental disorders such as depression and anxiety, for instance. Online therapy may also have several advantages over traditional therapy, including increased convenience for patients and cost-effectiveness.
Takeaway
Is therapy HSA reimbursable?
Different HSAs can have different rules, so it can be important to check with your provider. In general, though, most people are able to use money from their health savings account to pay for mental health services like counseling and psychiatric medications for a certain mental health condition, or they can use the funds in their account to reimburse their out-of-pocket costs for such mental health expenses.
How do therapists accept an HSA?
It can be important to check with your mental health care provider on whether they can accept payment through health savings accounts. It’s usually best to do this before you receive mental health related services like psychiatric care, therapy, or substance use (formerly “substance abuse”) counseling.
Can you get a reimbursement from your HSA?
Some people—especially those with a high-deductible health plan—choose to open health savings accounts to help them set aside pre-tax dollars for eligible medical expenses they may incur in the future. The HSA funds a person puts in their account can then be used either to pay for an eligible medical expense (like mental health care or medical care) directly using an HSA debit card or pay for them out of pocket and get reimbursed from their account later. In this way, HSAs can help people pay for a medical expense that their health insurance plans do not cover.
Before you receive health services, however, it can be important to ensure that the specialized medical care, prescription medications, mental health care/treatment, or other healthcare costs are considered qualified medical expenses per your particular HSA account guidelines. You may also need to prove that certain types of specialized treatment care—like inpatient psychiatric care, substance use clinics (formerly “substance abuse clinics”), and other high-cost types of care—are deemed “medically necessary” before being allowed to use your HSA account funds for them. If it’s not considered an eligible expense in the way your mental health provider or healthcare provider is explaining it and your insurance company won’t cover it, you’ll have to pay the bill out of pocket.
Can I use HSA funds for couples therapy?
In certain cases, you can use the money you have stored in a health savings account (HSA) or a flexible spending account (FSA) to cover treatment from a mental health provider. The advantage here is that FSA and HSA contributions are not subject to income tax, which is why they’re considered a type of tax-advantaged savings account. That said, the parameters and tax benefits of each account may be somewhat different, so it can be important to confirm with your HSA provider before attending counseling to see whether your therapy expenses are considered qualified medical expenses that you can use HSA money for. In many cases, mental health therapy for an individual is covered, but couples therapy, family counseling, and marriage counseling may not be unless they’re related to “sexual inadequacy or incompatibility treatment.”
Does an HSA cover physical therapy?
Many HSAs will allow you to use your funds to pay for medical expenses like physical therapy if you get a medical specialist’s note saying that this treatment is a medical necessity. However, what qualifies as an HSA-eligible expense can vary somewhat from one HSA plan to another, so checking with your HSA administrator and/or medical insurance provider first is recommended.
Can I use my HSA to pay for massage therapy?
In most cases, you can use HSA funds to pay for something like massage therapy if it counts as a qualified medical expense. This usually means that it has to be considered “medically necessary” by a doctor in order for an HSA reimbursement to apply. Check with your account provider to see whether massage therapy appointments qualify as healthcare expenses that you can pay for using your HSA funds.
What does an HSA cover?
Exactly which eligible expenses an HSA covers depends on the details of your particular account type as well as current legislation. In general, however, you can use HSA funds for medical treatment, mental health care services, medications, and products related to health or health treatment. In some cases, a doctor may have to deem a certain expense “medically necessary” in order for you to be allowed to use your HSA funds for it.
Some examples of commonly eligible HSA expenses can include birth control pills, medication to treat seasonal affective disorder, over-the-counter medications for a cold or flu, the prescription cost when a doctor or psychiatrist prescribes medication, copies of medical records, bandages, prosthetics, mobility aids, inpatient psychiatric care, and other types of medical expenses related to general health and well-being.
Is counseling a qualified medical expense?
In many cases, mental health care expenses like counseling qualify as a mental health care treatment expense for an HSA. However, it depends on the type of counseling, the need, and the type of healthcare provider offering it. For example, counseling or therapy received as a medical treatment may sometimes be covered—such as if it counts as mental health treatment for a mental health condition or mental health conditions. Pre-adoption counseling and diabetic nutrition counseling are also often covered.
How to bill an HSA for medical expenses?
The way you bill your HSA for eligible physical or mental healthcare services depends on the specific plan you have. In many cases, you can swipe a debit card connected to your account to pay your healthcare provider for services. In others, you’ll have to apply for a reimbursement after you pay out of pocket.
Do I get my pre-tax health savings account (HSA) money back?
In most cases, the money you put into a health savings account cannot be withdrawn for any reason besides qualified healthcare expenses unless you’re willing to pay tax and an additional fee on the money you withdraw. Speak to a financial advisor or your HSA administrator for more information about your unique situation.
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