Your Insurance Guide to Using HSA for Therapy

Updated 03/21/24

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A health savings account (HSA) can be a great way to help pay for health care expenses, including the cost of mental health care for a specific medical condition, which comes in handy if you can’t afford therapy. There are many benefits to using an HSA, including that the money you invest in it isn’t subject to federal or state income taxes, both when you put it in and when you take it out for a qualified medical expense.You can even invest funds within an HSA, and the appreciation and dividends earned are also tax-free. In addition, you aren’t required to take your money out of the fund when you get older, as you are with many other retirement investment products.Using your HSA funds for qualified medical expenses is pretty clear-cut. If you have a doctor’s appointment, need a prescription, or are going to have surgery, those are all qualified medical expenses. Your HSA funds can be used to pay for medical care and any other health care expense for your specific medical condition. The situation gets a little murkier, though, when it comes to using your HSA for therapy and other mental health care services, as some expenses are covered and others are not.

A health savings account (HSA) can be a great way to help pay for health care expenses, including the cost of mental health care for a specific medical condition, which comes in handy if you can’t afford therapy. There are many benefits to using an HSA, including that the money you invest in it isn’t subject to federal or state income taxes, both when you put it in and when you take it out for a qualified medical expense.

You can even invest funds within an HSA, and the appreciation and dividends earned are also tax-free. In addition, you aren’t required to take your money out of the fund when you get older, as you are with many other retirement investment products.

Using your HSA funds for qualified medical expenses is pretty clear-cut. If you have a doctor’s appointment, need a prescription, or are going to have surgery, those are all qualified medical expenses. Your HSA funds can be used to pay for medical care and any other health care expense for your specific medical condition. The situation gets a little murkier, though, when it comes to using your HSA for therapy and other mental health care services, as some expenses are covered and others are not.

Can You Use HSA for Therapy?Absolutely, both in-person and online therapy sessions can be covered using HSA and FSA funds, provided they are deemed medically necessary for your physical or mental health.The rules state that: “ Medical or mental health therapy is eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), and health reimbursement account (HRA). Therapy not required for a medical or mental purpose will typically not qualify, such as marriage or family counseling .” You might need to provide a letter of medical necessity if you’re audited or requested to.More succinctly put, if a medical doctor (and that includes a psychiatrist) deems your therapy to be an eligible medical expense, then you may use your HSA funds.“Read up on the complete rules governing HSA application to therapy. One important note is that you’ll be required to have a ‘billable diagnosis’ as opposed to ‘general’ life stressors. This would be similar to if you were using an insurance benefit.”–Talkspace therapist Ashley Ertel, LCSW, BCD, C-DBT

Can You Use HSA for Therapy?

Absolutely, both in-person and online therapy sessions can be covered using HSA and FSA funds, provided they are deemed medically necessary for your physical or mental health.

The rules state that: “ Medical or mental health therapy is eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), and health reimbursement account (HRA). Therapy not required for a medical or mental purpose will typically not qualify, such as marriage or family counseling .” You might need to provide a letter of medical necessity if you’re audited or requested to.

More succinctly put, if a medical doctor (and that includes a psychiatrist) deems your therapy to be an eligible medical expense, then you may use your HSA funds.

“Read up on the complete rules governing HSA application to therapy. One important note is that you’ll be required to have a ‘billable diagnosis’ as opposed to ‘general’ life stressors. This would be similar to if you were using an insurance benefit.”

What Mental Health Services Can You Use HSA For?

So, can you use HSA for mental health services? Ultimately, it just depends on why you’re seeking treatment. If you’ve been diagnosed with a mental health condition like bipolar disorder, schizophrenia, depression, or borderline personality disorder, then yes, you may use your HSA for therapy.

However, if you’re seeking therapy for a “non-medical” reason, like marriage counseling, grief counseling, general health, or stress management, you won’t be able to use the money in your HSA account fortherapy costs.

If your mental health services do qualify as being medically necessary, you can use your funds for several types of mental health expenses.

Acceptable HSA therapy costs can include:

Finding Support Through Insurance

Your HSA account might not be the first thing you think of when it comes to financing your mental health care. Yet this type of account allows you to reduce your tax liability and pay for your mental health care expenses, using pre-tax funds. For many people, it’s a win-win.

“If you have opened a HSA to help cover future costs of healthcare needs, learning how to apply it towards mental health therapy could pay itself in dividends! Check with your employer to see if they’ll contribute or match funds to your HSA as well.”

If you don’t already have an HSA account, check with your employer and see if they offer a program as part of your benefits package. If not, or if you’re self-employed or unemployed, there are many companies that offer independent HSA plans. Make sure to familiarize yourself with the current IRS rules regarding these accounts.

To qualify for an HSA, you must have a high-deductible health insurance plan. In addition, there’s a limit to how much you can contribute each year. You get to add a “catch up” bonus contribution once you reach age 55, and you can’t contribute to the account once you start receiving Medicare benefits at age 65. (However, you can still use funds in your account indefinitely).

It’s important to find a good therapist and start treatment for any mental health condition as early as possible. If you’re concerned about how you’re going to pay for any of your mental health expenses, tapping into a health savings account can be a great option, especially if you’ve been contributing to the account for several years. Why not use tax-free funds to pay for your mental healthcare?

For more information on HSA provider/account types and to learn how you can use them for mental healthcare services, see:

Looking foronline therapy that takes insurance? Talkspace partners with most major healthcare plans across the country likeCigna,Anthem,Aetna,Medicare,TRICARE, and more. Get connected at Talkspace and check your eligibility today.

Our goal at Talkspace is to provide the most up-to-date, valuable, and objective information on mental health-related topics in order to help readers make informed decisions.

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