5 ways your HSA can support your mental health
Stress and anxiety can affect our lives in countless ways, including our health and well-being, family dynamics, careers, financial stability, social lives and more. But it doesn’t need to be that way — you deserve to feel good about yourself and your life. Although mental health treatment can be costly, your health savings account (HSA) could make it easier on your wallet. Here's what to know about this tax-savvy account and how to use the money for your mental health.
What are the benefits of an HSA?
If you have a qualified high-deductible health plan, you may already have an HSA to go with it. If you have a qualified high-deductible health plan, you may be able to open an HSA through your employer or on your own. Unlike a healthcare flexible spending account (HCFSA), there is no deadline to spend the money. Another perk is your HSA is transferable, so you can take it when you leave your job.
HSAs are one of the best places to stash your cash because they offer three tax breaks. Since you can use the money for eligible medical expenses, these tax breaks are like getting a discount on your health costs.
- You may be able to contribute funds up to the Internal Revenue Code annual maximum directly from your paycheck to your HSA and it won’t be subject to income tax. Within the annual maximum, you can also make separate, non-payroll-related deposits and get the benefit at tax time.
- If your account allows you to invest the balance, your money has the chance to grow tax-free.
- You can use your HSA funds anytime to pay for eligible medical expenses without tax.
How to use your HSA for mental health
If you're wrestling with mental health issues, you're not alone. Some health insurance plans may have strict coverage eligibility and limited access to providers which could make getting treatment difficult. While this can lead to high treatment costs, your HSA could help ease the financial burden.
1. Prioritize your annual physical
If you have been skipping your annual physical, it may be time to prioritize those appointments. Here's why: Your doctor could diagnose an underlying condition, like diabetes, that could be contributing to your mental health issues. Your doctor may also identify adverse side effects from one of your medications.
Although many health plans cover preventative care, including depression or alcohol misuse screenings, your diagnostic tests could cost extra. Luckily, if you have built a large enough balance, you can use your HSA to help pay any bills you receive after your visit. Even without another chronic health problem, your physician could be a reliable resource. They may provide referrals for a therapist or psychiatrist if needed.
2. Consider going to therapy
Whether you're navigating a one-time crisis or ongoing challenges, working with a licensed therapist can be an effective way to develop healthier coping strategies. Over time, you may also boost your communication skills and improve your relationships.
While many health insurance plans cover therapy, you may need help finding the right in-network provider, especially if you need someone with specific types of expertise and paying for treatment out-of-pocket can be costly.
The good news is mental health therapy, including virtual appointments, is an HSA-eligible expense. If your HSA balance is sufficient, you can use your account to cover the cost of your sessions.
3. Meet with a psychiatrist
For an acute disorder, it may be helpful to meet with a psychiatrist. These medical doctors specialize in mental and behavioral health and may diagnose your condition. After getting diagnosed, you can work with your doctor on finding the proper treatment, which could include psychotherapy, medication, a combination of both and more. The great news is you can use your available HSA funds to help pay for these visits.
4. Consider taking medication
Depending on your diagnosis, your psychiatrist may prescribe a medication to manage your mental health symptoms. These medications may include antidepressants, antipsychotics, mood stabilizers, stimulants and more.
While some medications can be costly, your doctor may prescribe the less expensive generic versus the brand-name drug. If no generic is available or your doctor insists on the brand name, you can the available balance in your HSA to help cover the cost.
5. Evaluate your sleep habits
If getting enough sleep is a constant battle, you could be suffering from a sleep disorder. While anxiety, depression, substance abuse or another mental illness may contribute to sleep disorders, it may be another condition. You can start by speaking with your primary care physician. They may suggest getting a sleep study, which could identify disorders like sleep apnea, insomnia, sleepwalking, periodic limb movement disorder and more.
If your health insurance doesn't cover the sleep study, it may be an HSA-eligible expense. Before scheduling the sleep study, contact your insurance company and HSA plan administrator.
Which mental health expenses are HSA eligible?
While HSAs offer tax benefits, you can only use the money for eligible medical expenses. Otherwise, you will owe tax and a 20% penalty on the withdrawal. The following IRS-approved list includes mental health-related services like therapy, psychologist visits, psychiatric care, alcoholism treatment and more. Services like marriage counseling are not eligible. You can see the full list of eligible medical expenses here, but when in doubt, speak with a tax professional.
HSA therapy costs may include:
- Psychotherapy session: Psychotherapy (talk therapy) is an essential form of treatment for many types of mental health conditions. Because health insurance doesn’t always cover the total cost of treatment, using your HSA to pay the difference can be financially savvy.
- Medication prescribed by a psychiatrist: If your doctor or psychiatrist prescribes medication to treat symptoms of a mental health condition, this would be an eligible expense for which you could be reimbursed.
- Mileage allowance: Mileage to travel to and from appointments, the cost of tolls and parking, up to the allowable IRC rates, can be reimbursed by your HSA. You must be diligent about recording the miles to verify any travel expenses. Only travel related to medically necessary appointments is allowed.
- Psychiatric care: Psychiatric care is a covered HSA expense because psychiatrists are medical specialists. Both the cost of therapy and medication would be eligible.
- Specialized treatment care: Several types of medical treatment that rely on specialized medical care would be an eligible expense. For example, substance abuse clinics that offer inpatient treatments would qualify. Acupuncture used for physical or mental health care treatment might also be allowed. Finally, transportation to get to and from community group meetings or other outpatient sessions, like Narcotics Anonymous (NA) or Alcoholics Anonymous (AA) qualify.
- Over-the-counter (OTC) products: Several household products and OTC items are eligible for reimbursement. Many of them you can get directly from the HSA store. Purchases may result in a small commission to American Fidelity at no additional cost to you. OTC products that are specific to mental health care, like herbal supplements and a light therapy machine to treat seasonal affective disorder (SAD) could qualify with a letter of medical necessity from a medical practitioner.
Always save your receipts
Whether swiping your HSA card or getting reimbursed, saving your healthcare receipts is critical. Anytime you spend money from your HSA, you will need itemized receipts to prove each item is a eligible medical expense. Once tax season rolls around, you can ensure your receipts match your tax forms before filing your return. You can ask your healthcare provider for itemized receipts after each service or a cumulative record at the end of the year.
Prioritize your mental health
Unfortunately, mental health stigma still makes it difficult for some to seek treatment, but the sooner you begin, the faster the relief may come. Mental health issues can be a life-long challenge, but you may find it's easier to get healthy or manage a chronic condition with a proactive approach. Mental health treatment—therapy, medication, self-care—has made recovery a reality for many people experiencing mental illness. Although taking the first steps can be confusing or complicated, it's important to start exploring options.
It may take a combination of tactics, but once you start feeling better, all of your efforts will be worth it.
This blog is up to date as of February 2024 and has not been updated for changes in the law, administration or current events.
HSA Store
Shop for Eligible Items on the HSA Store
You may purchase HSA-eligible items online at the HSA Store. Browse medical supplies, over-the-counter medication, prescriptions, and more.
Purchases may result in a small commission to American Fidelity at no additional cost to you.
