Mental health currently represents one of the biggest healthcare challenges in the United States. It is estimated that:
- One out of every five adults in the U.S. experiences a mental illness at some point in their lives
- Nearly 10 million adults live with a serious mental illness
- One-half of all chronic mental illnesses begin by the age of 14; three-quarters by the age of 24
Yet, the problem isn’t so much the prevalence of mental illness; it’s the fact that so many people are not receiving treatment for it. According to the National Alliance of Mental Illness (NAMI), nearly 60 percent of adults and 50 percent of children ages 8 – 15 with a mental illness didn’t receive mental health services in the previous year.
Why don’t people suffering from mental illness receive the help they need?
One reason has to do with the mental health stigma that prevents many people from addressing the problem and seeking help. Another significant reason is cost. According to the U.S. Substance Abuse and Mental Health Services Administration (SAMSHA), half of all mental illness patients rank treatment costs as the primary reason they don’t seek help – even if they have health insurance.
Combating mental health costs with an FSA or HSA
Many employers offer consumer-directed healthcare (CDH) accounts as part of their benefits packages. With a Flexible Spending Account (FSA), Health Savings Account (HSA), or a Health Reimbursement Arrangement (HRA), the cost of receiving mental health treatment can be more affordable. These tax-advantaged accounts enable individuals and families to pay for a wide variety of qualified healthcare expenses with pre-tax money.
While there are no health insurance requirements for an FSA, there are some requirements for HSAs. To qualify for a Health Savings Account you must meet the following:
- Have a high deductible healthcare plan (HDHP)
- Do not have any additional health coverage (certain exceptions are permitted)
- Are not enrolled in Medicare
- Cannot be claimed as a dependent on another person’s tax return
As for HRAs, eligible expenses are specific to the employer. Check the summary plan description (SPD) or talk with your HR representative to see if mental health services and treatments are covered by your plan. Learn more about the differences between an HRA and HSA.
Covering treatments with your CDH account
Under IRS Publication 502, “Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.” For those living with mental illness, there are many treatments covered by FSAs and HSAs, including:
Many mental illnesses can be treated with prescription medicines. These include depression, anxiety, obsessive/compulsive and eating disorders and bi-polar disorder.
Despite the stigma around mental health that deters people from talking about these issues, it is estimated that 1 out of every 10 Americans currently takes some kind of anti-depressant to help manage their condition. As long as they are prescribed by a licensed doctor, the cost of these medications can be paid for with your benefits account.
Keep in mind that anti-depressants have been around long enough that most are available in generic form; generic prescriptions generally cost less than brand name versions. Be sure to talk to your healthcare provider about using generic medications.
Although mental health problems are often first diagnosed by a primary care giver, many types of mental illness require specialized care. In addition to prescriptions, psychiatric care may be part of a person’s treatment plan.
Psychiatrists are typically the ones who prescribe the antidepressants and other types of medications, as they have more expertise in these areas. They may also provide services such as psychotherapy. Psychiatric care and treatments are IRS-approved healthcare expenses.
Clinical and Counseling Psychologists
Mental health patients may also seek help from a psychologist. Since psychologists are not licensed medical doctors, they cannot prescribe medications. However, they can administer psychological tests and work with the patient using different modes of behavioral or cognitive therapies.
Treatments provided by a psychologist are eligible for FSA or HSA reimbursement if you receive care for specific types of mental illness. Seeing a psychologist for general improvement of mental health is not a qualified medical expense.
In addition to prescription medications and office-based therapy programs (whether with primary care physicians or specialists), mental health patients can also seek help from specialized treatments such as rehabilitation centers for addiction or other medical problems.
With your employer-sponsored healthcare benefit account, in- and out-patient treatment for alcoholism, drug addiction and other types of substance abuse qualifies as an eligible expense. This includes the cost of meals and lodging for in-patient treatment, as well as transportation expenses for attending meetings of Alcoholics Anonymous, Narcotics Anonymous, or similar recovery groups.
HSA funds can also be used to pay for other types of therapy programs, such as physical, occupational and speech therapy, to help individuals return to their normal lives after an accident, surgery or some other type of life-disrupting event.
Acupuncture and hypnosis
Did you know that you can use your FSA or HSA to pay for acupuncture? Acupuncture is often used to treat people suffering from depression, eating disorders and other types of mental illness. In addition, with a Letter of Medical Necessity from a physician, mental disorders treated with hypnosis may be paid for with a healthcare benefits account.
Getting treatment today
If you or a dependent suffer from mental illness, you deserve to receive appropriate treatment. Seeking care for mental health can be affordable when you have an FSA or HSA. Many treatments and medications fall under the IRS guidelines for eligible expenses. Talk to your HR about your company’s benefit plan, and see if an FSA or HSA (or HRA) is right for you.