Does an HSA Cover Mental Health Expenses?

A Health Savings Account (HSA) is a tax-advantaged savings account designed to help individuals pay for medical expenses. HSAs offer tax benefits for contributions, growth, and withdrawals. This article clarifies how HSAs can be used to cover mental health expenses, outlining which services qualify and how to utilize these funds.

HSA Eligibility and Mechanics

To contribute to an HSA, an individual must be covered by a High-Deductible Health Plan (HDHP) and not have other disqualifying health coverage. The individual must also not be enrolled in Medicare or claimed as a dependent. For 2025, an HDHP features a minimum deductible of $1,650 for self-only coverage or $3,300 for family coverage, with a maximum out-of-pocket limit of $8,300 for self-only or $16,600 for family coverage.

HSA contributions are tax-deductible, reducing taxable income. Funds within the account grow tax-free, and withdrawals for qualified medical expenses are also tax-free. This triple tax advantage makes HSAs a valuable tool for healthcare savings, allowing individuals to accumulate funds for eligible medical costs without incurring tax liabilities.

Qualifying Mental Health Expenses

Many mental health services are considered qualified medical expenses under IRS guidelines. These expenses must be primarily for the diagnosis, cure, mitigation, treatment, or prevention of a physical or mental disability or illness.

Eligible mental health expenses include psychiatric care, such as appointments and medication management, and psychotherapy or counseling sessions with licensed professionals like psychologists, therapists, or social workers. Inpatient and outpatient treatment programs for mental health and substance abuse conditions also qualify. Prescription medications for mental health conditions, like antidepressants or anti-anxiety medications, are covered. Diagnostic services related to mental health, such as assessments and evaluations, also qualify.

Using Your HSA for Mental Health

Individuals can pay for services using an HSA debit card, if provided by their account administrator. Alternatively, they can pay out-of-pocket and then reimburse themselves from their HSA.

Maintaining detailed records is important for all expenses paid with HSA funds. This includes retaining receipts, invoices, and Explanation of Benefits (EOBs) for tax purposes. These records serve as proof that the expenses were qualified medical costs, which is important in case of an IRS audit. The account holder is responsible for proving the eligibility of any expense.

Non-Qualifying Mental Health Expenses

Not all expenses related to mental well-being are considered qualified medical expenses for HSA purposes. Costs for general health or wellness activities that are not prescribed for a specific medical condition are typically excluded. For instance, gym memberships, meditation apps, or general wellness retreats usually do not qualify.

Relationship counseling or general family counseling, if not tied to a specific diagnosed mental health condition, is generally not an eligible expense. Life coaching or general stress reduction classes that are not part of a treatment plan for a diagnosed illness are not covered. Expenses for illegal treatments or services not recognized by the IRS as medical care also do not qualify for HSA reimbursement.