As Americans look to improve their overall wellbeing, Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs) need to be a bigger part of mental health cost conversations.
While we often talk about medical illnesses on this blog and throughout the benefits industry when analyzing U.S. health care needs and consumerism trends, to address the bigger picture we need to think about “whole health” – the body and the mind.
According to the American Psychological Association, 68 percent of adults with mental health conditions also have medical conditions, and 29 percent of adults with medical conditions have mental health conditions.
Millions of Americans suffer from some form of mental health illness, but numerous challenges often deter them from obtaining treatment – and cost is a big one.
In fact, the U.S. Substance Abuse and Mental Health Services Administration (SAMSHA) found that 50 percent of those suffering from mental illness cited mental treatment costs as the reason they didn’t obtain treatment – making it the #1 reason identified.
This is a complex challenge that requires multiple solutions to solve for it.
HSAs, FSAs, and HRAs should be part of that equation, as these accounts can help individuals pay for many eligible mental health expenses using tax-free funds. Below are a few examples.
(Please keep in mind that your employer might have additional limitations on what can be purchased with your account funds. See IRS Publication 502 and your plan documents for more information.)
The Anxiety and Depression Association of America, (ADAA) suggests that Major Depressive Disorder affects more than 16 million American adults, or about 6.9% of the U.S. population age 18 and older in a given year.
It is also estimated that about 1 in 10 Americans is on some form of anti-depressant to treat these conditions.
The good news is that medications prescribed by a licensed doctor and designed to treat many mental health illnesses are eligible for reimbursement with an FSA, HSA, or HRA.
Prozac, Paxil, Zoloft, Celexa, Lexapro, Valium, Ativan, Ritalin, and Xanax are just a few examples of common medications you might know by name prescribed to treat anxiety, depression, Bi-polar Disorder (BPD), eating disorders (bulimia nervosa, anorexia nervosa, binge eating, etc.), Obsessive Compulsive Disorder (OCD), or other mental health conditions.
Even an over-the-counter Seasonal Affective Disorder (SAD) Light can be purchased with a consumer-directed health care account as long as it is prescribed by a doctor.
While many prescriptions work for some, the same drug may not work for others. It can take some time for doctors to find the medication and treatment plan right for each patient.
While this can be expensive, you can use funds in your HSA, FSA and HRA accounts to pay for these prescriptions with tax-free funds.
It is important to discuss all your symptoms with a licensed doctor so that the best course of treatment and necessary medication adjustments can be determined.
And that leads to the next eligible expense:
Many people know that an FSA, HSA, and HRA can be used to pay for the out-of-pocket costs associated with seeing a primary care physician, whom may be one of the first care providers to see a patient suffering from a mental health disorder.
What they may not know is that psychiatric care – treatment provided by a psychiatrist – is likewise eligible for reimbursement with a Flexible Spending Account, Health Savings Account, or Health Reimbursement Arrangement.
Psychiatric care normally consists of psychotherapy and psychiatric medicine, such as those mentioned in the previous section.
When provided in an outpatient setting, treatments for psychiatric care often entail appointments with a psychiatrist and follow-ups to assess the changes to the patient’s mental health and the impact of medications, as well as to provide further behavioral and treatment recommendations.
Counseling and Psychoanalysis
Beyond the care provided by a psychiatrist and other physicians, patients may be treated by a psychoanalyst and/or psychologist.
While they generally can’t provide prescriptions, clinical and counseling psychologists in the US can administer psychological tests and several varieties of psychotherapy, including behavioral, cognitive, psychodynamic, humanistic, existential, and systemic.
The treatment provided by a psychologist is eligible for FSA, HSA, and HRA reimbursement if the purpose of the treatment is for medical care and not for the general improvement of mental health.
Psychoanalysis can also be paid for using a consumer-directed health care account if a medical doctor provides a Letter of Medical Necessity (LMN) recommending that a patient seek psychoanalysis to treat or prevent a condition or disease.
In this form of treatment, a patient will visit a psychoanalyst frequently – often four or more times per week – to share their thoughts. The psychoanalyst listens and interacts with the patient to determine factors unknown to the patient that are nevertheless impacting his or her mental health.
Once this has been accomplished, the psychoanalyst will aim to convey the findings to the patient so that he or she can make lifestyle and behavioral adjustments.
In addition to the above-mentioned expenses, there are of course a wide variety of treatments beyond prescription medications and office-based therapy programs that many patients with mental health disorders find helpful – and which can often be paid for with an FSA, HSA, or HRA.
Drug addiction, alcoholism, and substance abuse treatment is a prime example.
Amounts paid for in-patient treatment (including meals and lodging) at therapeutic centers for alcohol/drug addiction and outpatient therapy sessions will qualify for FSA, HSA, and HRA reimbursements, as will transportation expenses associated with attending meetings of an Alcoholics Anonymous, Narcotics Anonymous, or similar group in the community.
Acupuncture is another form of therapy that many people may not realize makes the list of FSA, HSA, or HRA eligible expenses, but it is.
Some studies have found acupuncture to be a helpful adjunct therapy for treating those suffering from mental health disorders such as major depressive disorder.
Similarly, hypnosis can be used to treat addiction, eating disorders, phobias, traumas, and many other mental health conditions.
This is yet another treatment option that may not come to mind when you think about what your FSA, HSA, or HRA can buy, but it’s an eligible expense as long as you’ve consulted a medical doctor and he or she has written a Letter of Medical Necessity.
To recap, some of the many potentially FSA, HSA, and HRA eligible expenses related to mental health care include, but are certainly not limited to:
- Prozac, Zoloft, and other prescription medications along with some other over-the-counter items that may require a prescription to be eligible;
- Psychiatric care normally consists of psychotherapy and psychiatric medicine;
- Treatment provided by a psychologist as well as psychoanalysis with a LMN;
- Drug addiction, alcoholism, and substance abuse treatment;
- Complementary treatments like acupuncture and hypnosis
Hopefully by using tax-free funds from a CDH account the cost of treatment becomes less likely to prevent individuals with a mental health illness from seeking it.
As stated at the beginning of this post, please keep in mind that your employer might have additional limitations on what can be purchased with your account funds. See IRS Publication 502 and your plan documents for more information.
Andrew Gertz contributed to this article.