Can I Use My HSA for Online Therapy?

Health Savings Accounts (HSAs) offer a tax-advantaged way to pay for qualified medical expenses. As online therapy becomes a widely used method for mental health support, this article explores how an HSA can cover these costs, outlining the rules and practical considerations.

Understanding HSA-Eligible Medical Expenses

An HSA helps individuals cover medical care costs, as defined by the Internal Revenue Service (IRS). An expense is HSA-eligible if it prevents or alleviates a physical or mental defect or illness. This includes services and products for maintaining health or treating medical conditions.

Eligible medical expenses include doctor visits, prescription medications, hospital services, and diagnostic tests. These expenses must not be reimbursed by another source to qualify for HSA payment. The IRS provides guidance on what constitutes a qualified medical expense.

An expense must be for medical treatment, diagnosis, cure, mitigation, or prevention of disease. It also includes treatments affecting any body structure or function. This definition helps determine if services, like online therapy, meet HSA coverage criteria.

Online Therapy Services and HSA Coverage

Online therapy is an HSA-eligible medical expense when it meets the same criteria as in-person care. The service must be provided by a licensed medical professional for the diagnosis, cure, mitigation, treatment, or prevention of a medical condition, including mental health conditions.

Delivery mode, whether in person or online, does not determine eligibility; the service’s nature and provider’s qualifications do. Psychotherapy, counseling for diagnosed mental health conditions, and psychiatric evaluations conducted virtually by licensed professionals qualify. These services address specific medical or mental health needs.

Not all online mental wellness or coaching services are HSA-eligible. General wellness applications without a therapeutic component, unsupervised self-help programs, or relationship coaching not tied to a medical diagnosis do not qualify. The service must directly treat a medical condition for HSA coverage.

Making Payments with Your HSA

Paying for eligible online therapy services with an HSA is simple. Many HSA providers issue a debit card linked to your account, usable to pay the online therapy provider at the time of service. This works like a regular debit card.

Alternatively, pay for online therapy out-of-pocket and then reimburse yourself from your HSA. This common practice offers payment flexibility. Keep thorough records of all transactions when reimbursing yourself.

Maintain detailed documentation for tax purposes and IRS audits. This includes receipts, invoices, and statements from the online therapy provider showing the date of service, description, amount paid, and provider’s credentials. If medical necessity is unclear, a Letter of Medical Necessity (LOMN) from a healthcare professional may be required.

Sources
https://www.irs.gov/publications/irs-pub-502