Access to mental healthcare is crucial for overall well-being, but the cost of therapy can be a significant barrier for many, especially if you don’t have insurance. Depending on your work situation and circumstances, there are programs available that can help make therapy more affordable and accessible. Health savings accounts (HSAs), flexible spending accounts (FSAs), and employee assistance programs (EAPs) are valuable resources offered by employers to support their employees’ mental health needs. These programs can provide financial assistance and confidential support for individuals seeking therapy services, making it easier to prioritize mental health.
What is a health savings account (HSA)?
A health savings account (HSA) is a valuable tool that can help you access mental healthcare and therapy services while saving on expenses. These tax-exempt personal savings accounts allow you to set aside pre-tax dollars to cover qualified medical expenses, including copays, deductibles, and prescription medications. With an HSA, you can contribute funds that are not subject to federal income tax, providing significant savings on healthcare costs.
What is a flexible spending account (FSA)?
A flexible spending account (FSA) is an employer-provided benefit program that offers tax advantages for medical care expenses. It allows employees to set aside pre-tax dollars from their paychecks to pay for qualified medical expenses, such as deductibles, copayments, and certain other healthcare costs.
The funds in an FSA can be used for various medical expenses, including vision and dental care, and certain over-the-counter medications. The key feature of an FSA to note is that any unused funds may be forfeited at the end of the plan year unless the plan includes a grace period or carryover provision.
What’s the difference between an HSA and an FSA?
The primary differences between an HSA and an FSA lie in their eligibility requirements, rollover rules, and flexibility in fund usage. While both account types offer tax advantages for medical expenses, HSA funds can be rolled over indefinitely and are not tied to a specific employer or health insurance plan.
On the other hand, FSA funds are usually subject to a “use it or lose it” rule. They’re provided by the employer, meaning any unused funds may be forfeited at the end of the plan year unless the plan includes a grace period or carryover provision.
Another key difference is that an HSA is tied to a high-deductible health plan (HDHP) and is individually owned and portable, which allows you to contribute funds and use them for qualified medical expenses throughout your lifetime. In contrast, an FSA is limited to employees enrolled in the program and may require them to estimate their healthcare needs for the upcoming year, limiting the flexibility in contributions and rollover options.
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What’s the benefit of using an HSA or FSA?
Both HSAs and FSAs offer tax advantages and savings opportunities for qualified medical expenses.
Key benefits of using an HSA
Triple tax advantages – Contributions are tax-deductible, funds grow tax free, and withdrawals for qualified medical expenses are tax-free.
Portability – The account is individually owned and can be moved from one employer to another, providing long-term savings and investment potential.
Long-term savings – HSA funds can be rolled over indefinitely, allowing for potential accumulation of funds for future medical expenses.
Benefits of using an FSA
Pre-tax contributions – Similar to an HSA, contributions to an FSA are made with pre-tax dollars, reducing taxable income.
Immediate access – FSA funds are available for use at the beginning of the plan year, allowing for immediate reimbursement for eligible expenses.
Employer contributions – Some employers may choose to contribute to employees’ FSAs.
Can I use my HSA for therapy?
The IRS guidelines allow HSA funds to be used for the treatment of various mental health conditions diagnosed and prescribed by a healthcare professional. This includes therapy services such as psychotherapy sessions, prescribed medication, inpatient psychiatric care, and even transportation expenses related to obtaining therapy. The HSA funds can also cover medication prescribed by a qualified mental health professional, making essential prescriptions more affordable.
The flexibility of an HSA extends to covering a wide range of mental health conditions listed in the Diagnostic and Statistical Manual of Mental Disorders (DSM-5), including anxiety disorders, ADHD, depression, bipolar disorder, PTSD, and eating disorders.
Can I use a FSA for therapy?
According to FSA guidelines, expenses related to the diagnosis, cure, mitigation, treatment, or prevention of disease, including mental illness, are eligible for reimbursement. Therefore, expenses related to therapy, such as counseling sessions, psychiatric care, and prescribed medication for mental health conditions are generally eligible to be paid for using FSA funds.
In addition to therapy, there are various mental health-related expenses that can be covered by an FSA. This may include expenses for mental wellness activities such as yoga classes, meditation sessions, and exercise programs.
These activities, although they may have physical components, are often integral to mental wellness and can be eligible for FSA reimbursement if they are directly related to the treatment, mitigation, or prevention of a diagnosed health condition such as stress, anxiety, or depression. A letter of medical necessity may be needed from your healthcare provider.
It’s important to note that FSA guidelines can vary, and it’s essential to review the specific details of your FSA plan to determine which mental health-related expenses are eligible for reimbursement. Always consult your plan administrator or benefits provider for comprehensive information on covered expenses related to mental health and wellness.
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What are eligible expenses for an HSA?
HSA funds can be used to cover various expenses, ranging from therapy services to activities that contribute to mental well-being. These include:
Mental health expenses
Therapy services – Expenses related to counseling sessions, psychotherapy, and psychiatric care for mental health conditions such as anxiety, depression, PTSD, and bipolar disorder are generally considered eligible for HSA reimbursement.
Medication – Prescription medication prescribed by a qualified mental health professional to treat mental health conditions is typically an eligible HSA expense.
Inpatient psychiatric care – Costs associated with inpatient treatment for severe mental health conditions are generally eligible for HSA reimbursement.
Wellness expenses
Exercise programs – Expenses related to exercise programs recommended as part of a treatment plan for a diagnosed medical condition, including mental health issues, may be eligible for reimbursement.
Yoga and meditation classes – Activities like yoga and meditation, when prescribed as part of a treatment plan for a specific health condition, can qualify as eligible HSA expenses.
Mindfulness and stress management programs – Costs associated with programs focused on stress management and mindfulness, which are often beneficial for mental health, may be eligible for HSA reimbursement.
It’s important to note that while many mental health and wellness expenses are eligible for HSA reimbursement, certain criteria must be met. Expenses must be incurred for the diagnosis, cure, mitigation, treatment, or prevention of a specific medical condition, including mental health issues. Expenses must be deemed medically necessary and prescribed by a qualified healthcare professional to qualify for reimbursement.
What are eligible expenses for an FSA?
The eligible expenses for an FSA are generally the same as those of a health savings account (HSA). This includes coverage for therapeutic services, medication, inpatient treatment, physical activity programs, and mind-body practices. Expenses related to health screenings and preventive care are also typically eligible for FSA reimbursement.
Similar to an HSA, certain conditions and criteria must be met for an expense to be considered eligible, such as being deemed medically necessary and prescribed by a qualified healthcare professional.
What is an EAP?
Employers often provide Employee Assistance Programs (EAPs) as part of their benefits package to offer confidential mental health services and resources aimed at helping employees manage personal and work-related challenges. These may include emotional and substance use challenges, and interpersonal relationships.
Did you know?
According to the Office of Personnel Management, EAPs are offered at no cost to employees — but many people never use them because they don’t know they have access. Check your employee benefits portal or ask HR.
EAP services are offered at no cost to the employee and can encompass both in-person and online sessions, depending on the employer’s specific program. EAPs may be staffed by licensed therapists who are contracted to run the programs, ensuring that employees have access to professional support when needed. The services and delivery models of EAPs can vary between employers, but the overarching goal is to provide supportive and confidential assistance.
There are typically caps to EAP benefits, such as a certain number of sessions or amount that can be spent each year. Check with your plan administrator or employer for more information.
How do I use an EAP for therapy?
If you are an employee looking to access therapy through your company’s EAP, here are the typical steps you may need to take:
Check your benefits – Start by reviewing your employee benefits package or speaking with your HR department to confirm if your employer offers an EAP and the specific services it covers, including therapy benefits.
Contact the EAP provider – Once you have confirmed the availability of an EAP, reach out to the EAP provider to inquire about accessing therapy services. The EAP provider’s contact information is usually provided through your HR department or in your benefits information.
Schedule an appointment – The EAP provider will assist you in scheduling an appointment with a licensed therapist or counselor who is part of the EAP network. You may have the option to choose between in-person or online therapy sessions, depending on the program’s offerings.
Final thoughts
HSAs, FSAs, and EAPs are three of the most underused tools for making therapy more affordable — and they can often be combined with insurance to lower costs even further. If you’re unsure which applies to your situation, your HR department or benefits portal is the fastest place to start. Grow Therapy accepts HSA and FSA cards, and can verify your insurance coverage before you book, so you have a clear picture of what you’ll pay before your first session.
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Frequently asked questions
Can I use my HSA or FSA card to pay for therapy directly?
Yes — most therapists and platforms, including Grow Therapy, accept HSA and FSA cards the same way they’d accept a debit card. You don’t need to pay out of pocket and submit for reimbursement unless your card is declined for an ineligible expense.
Does my HSA or FSA cover online therapy?
Yes. Telehealth therapy sessions are generally eligible expenses under both HSAs and FSAs, provided the therapy is for the diagnosis or treatment of a mental health condition. The same rules apply whether sessions are in-person or virtual.
What happens to my FSA money if I don’t use it by the end of the year?
Unused FSA funds are typically forfeited at the end of the plan year — this is the “use it or lose it” rule. Some plans offer a grace period of up to 2.5 months or allow a limited carryover (up to $640 in 2024). Check with your plan administrator for your specific terms.
Can I use my EAP and regular insurance at the same time?
Not for the same session — EAP sessions are billed through the EAP, not through your health insurance. However, once your EAP sessions are exhausted, you can transition to using your regular insurance for ongoing therapy. Many therapists on Grow Therapy accept both EAP referrals and standard insurance.
How do I find out if my employer offers an EAP?
Check your employee benefits portal, your offer letter or benefits summary, or contact your HR department directly. EAP details — including the provider name, number of covered sessions, and how to access services — are usually listed there.
About Grow Therapy
Grow Therapy is an online therapy platform that meets you where you are. With thousands of providers, therapy and medication support, and insurance-covered care, starting therapy is faster, easier, and more affordable.
