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Finding the right mental health counselor or therapist isn’t as easy as finding the right dentist. Usually, you have to put in some work—feeling the counselor out to see if their methods will actually suit your needs.
But once you’ve found someone you’d like to work with, there’s the inevitable issue of payment, which usually brings a host of logistical questions: Does the therapist accept insurance? If they do, are they in network? If you’re paying out of pocket, can you afford it?
Healthcare in the United States being what it is (a for-profit hellscape), there’s a feasible workaround to help pay for mental healthcare that many people don’t use to their advantage: flexible spending or health savings accounts.
What are FSAs and HSAs?
Flexible spending account and health savings account are similar financial instruments, with some exceptions and caveats.
Health savings accounts (HSAs) are options included in basically all major health insurance plans with large deductibles. If you’re enrolled in an employment-based healthcare plan, you can funnel some of your paycheck aside into one of these accounts, pre-tax, and use those funds to pay for deductibles, co-pays and other medical expenses. (If you don’t have employment-based health insurance, you can still deposit money into your HSA, though without the pre-tax luxury.) This means an HSA is essentially a rainy-day fund to pay for physical and mental health expenses—and the money remains yours even if your plan is terminated or you leave the job.
An FSA, on the other hand, covers the same expenses but is only guaranteed by a specific employer. Unfortunately, FSA funds expire after a year if they’re not used by a certain date, and you typically only have a certain window in which to submit claims for any expenses accrued in the prior year. Check with your employer to see if you’re able to roll over any unused portion of your FSA—you can usually roll over up to $500.
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Unlike the typically bureaucratic and thorny process of paying for healthcare in a general sense, FSAs and HSAs are quick and actionable. Typically, the money you contribute can even be accessed with a special debit card (though you can also submit applicable expenses to your plan’s administrator for reimbursement).
The healthcare resource Choosing Therapy breaks down more of the flex-account minutiae:
With an HSA, every penny you put into the account (up to the contribution limit) remains yours until you spend it on qualifying health care. Your HSA savings can be invested, similar to 401(k) savings, and grow tax free. When you ultimately need to withdraw funds to cover medical or mental health expenses, those funds remain untaxed.
You can use money from your HSA for therapy visits, hospital stays, and more. That makes it a helpful resource for people exploring mental and behavioral healthcare payment options
Both HSAs and FSAs have contribution limits, each of which were 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,” according to Choosing Therapy, while “employees can contribute $2,750 to health FSAs,” according to People Keep.
How to use and HSA or FSA to pay for mental healthcare
This is easy, at least when it comes to swiping your card. Since your account is actionable via a special debit card provided by either your employer or health insurance provider, all you have to do is provide the card number to whoever is billing you when you pay for your visit—whether in full or in the form of a co-pay. If you want to be reimbursed for past services or co-pays, you can ask your therapist or counselor for a receipt and submit it to your account provider in whatever way is required by your plan.
But then things get murky. It’s important to keep in mind that your HSA/FSA doesn’t give you a cart blanche opportunity to pay for your mental healthcare however you want, so you’ll have to navigate some red tape first. The HSA/FSA models are great when it comes to paying for regular doctor’s visits and even medicine prescribed by a psychiatrist, but paying for talk therapy might require a referral from your primary-care physician.
The healthcare experts Connect Your Care explain:
The treatment provided by a psychologist or psychiatrist is eligible for FSA or HSA reimbursement if the purpose of the treatment is for medical care and not for the general improvement of mental health. For this reason, things like marriage counseling or couples’ therapy are not eligible for FSA and HSA coverage.
As a general rule, it’s likely that talk therapy and psychiatric care are HSA/FSA “eligible,” but it’ll be necessary to talk to your healthcare provider and or human resources department to understand how to approach the situation first.
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