Treating Mental Health with a CDH Account

Treating Mental Health with a CDH Account

Mental health currently represents one of the biggest healthcare challenges in the U.S. 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
  • Up to 90% of suicides are attributed to mental illness
  • Untreated mental illness costs the U.S. almost $200 billion a year in lost productivity

Yet, the problem isn’t so much the prevalence or the cost 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?

Mental Health Stigma and Paying for Care

One reason people do not get help has to do with mental health stigmas. One type of stigma – social stigma – consists of the prejudiced attitudes and negative thinking that others have about mental illness. Another is self-perceived stigma, which is internalized, but can affect mentally ill people just as much as social stigma. Both cause the sufferer to feel shame or guilt about circumstances that are beyond their control.

However, for many people, the biggest reason for not getting help 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.

Paying for Mental Health Treatments

Having a consumer-directed healthcare (CDH) account can help with costs. A CDH account is a type of medical savings account that helps consumers pay for eligible medical expenses with pre-tax dollars. Three of the most popular CDH accounts include Flexible Spending Accounts (FSA), Health Savings Accounts (HSA), and Health Reimbursement Arrangements (HRA). FSAs and HRAs are sponsored exclusively by employers as part of their overall benefits plan. With an HSA, a person on a qualified high deductible health plan (HDHP) can open the account through their employer or another institution, such as a bank.

Consumer directed healthcare accounts give participants more control over their healthcare dollars. People may pick and choose which qualified expenses to spend their money on, including many mental health treatments. Learn more about the differences between an HRA and HSA.

Behavioral Health Services: What is Covered

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, FSAs and HSAs cover many different types of behavioral health services, including:

Prescription medications

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.

Psychiatric care

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 behavioral health services.

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 CDH behavioral health service and can’t be paid for with a CDH account.

Specialized treatments

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 eligible behavioral health services. 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. Physical, occupational, and speech therapies 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 acupuncture and hypnosis are approved for purchase with a CDH account? 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.


DataPath, Inc is a leading provider of cloud-based technology solutions for FSA and HSA account administration.

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