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HSA & FSA for Mental Health Spending

You can use your Health Savings Account (HSA) or Flexible Spending Account (FSA) to pay for the cost of mental health care qualified expenses.

Although Health Savings Accounts & Flexible Spending Accounts may cover services beyond mental health, we will exclusively cover mental health support in this section of our guide. Learn more about HSAs by listening to our podcast episode,  Health Savings Accounts Explained.

Health Savings Account

A Health Savings Account (HSA) is a tax-advantaged savings account that workers can use to pay for eligible health care expenses, such as services related to mental health. HSAs are typically offered when we have a high-deductible health insurance plan. This allows us to set aside pre-tax dollars to pay for eligible health care expenses. You can’t contribute more than the annual IRS-allowed limit, which is $3,850 for an individual, and $7,750 for a family in 2023.

HSAs offer various advantages, such as tax-free contributions, tax-free withdrawals for eligible expenses, and the ability to roll over unused funds from plan year to year.

Keep in mind that not all mental health expenses may be eligible for reimbursement under an HSA, so always check with your HSA provider (or employer) to see what expenses are covered.

Some eligible expenses for mental health may include:

  • Prescription medications prescribed for mental health conditions, such as anxiety or depression.
  • Out-of-pocket costs for therapy sessions with a therapist or psychiatrist.
  • Co-payments or deductibles associated with mental health care services.
  • Behavioral health programs, such as grief counseling or addiction recovery programs.

Flexible Spending Account

A Flexible Spending Account (FSA) is a tax-advantaged account that workers can use to pay for eligible health care expenses, such as services related to mental health. FSAs are typically offered as a part of an employee benefits package and allow employees to set aside pre-tax dollars to pay for eligible health care expenses. You can’t contribute more than the annual IRS-allowed limit, which for 2023 is $3,050 for an individual, and $5,000 per household or $2,500 if married, filing separately. It’s important to note that employers may also set a maximum contribution limit for employees if they want.

One key feature of an FSA is that the funds are "use it or lose it” meaning that they do not roll over into the following plan year. Also, you cannot have an FSA if you’re self-employed.

Keep in mind that not all mental health expenses may be eligible for reimbursement under an FSA, so always check with your FSA provider (or employer) to see what expenses are covered. Some eligible expenses for mental health may include (similar to HSAs):

  • Prescription medications prescribed for mental health conditions, such as anxiety or depression.
  • Out-of-pocket costs for therapy sessions with a therapist or psychiatrist.
  • Co-payments or deductibles associated with mental health care services.
  • Behavioral health programs, such as grief counseling or addiction recovery programs.

If you or someone you know is struggling with their mental health, contact a mental health professional for support. If you need immediate assistance that is not life-threatening, the National Alliance on Mental Illness (NAMI) provides a helpline for people experiencing mental health concerns: 1-800-950-NAMI (6264).

 

2875612     04/23