How To Use Your FSA (Flexible Spending Account) For Therapy And Mental Health Care
Paying for therapy and other forms of mental health care can be expensive and unattainable for some, especially when insurance coverage is limited or inconsistent. With a flexible spending account (FSA) or health savings account (HSA), individuals may be able to take advantage of a financial resource designed to help with these types of health expenses, depending on the person’s plan.
An FSA allows individuals to set aside pre-tax income to pay for eligible medical costs, including many mental health services, without being forced to pay premiums. From therapy sessions to psychiatric medications, FSAs can play a critical role in making emotional and psychological support more affordable. That said, it’s important to remember that these accounts often come with strict deadlines, and unused funds may be forfeited at the end of the year rather than rolling over to the following year. Understanding how FSAs work and how to apply them to mental health care before that time limit arrives can be important for getting the professional support you need.
BetterHelp currently accepts HSA/FSA cards and is recognized as an eligible expense by most HSA/FSA providers. Get started today.
Understanding flexible spending accounts (FSAs) and their impact on mental health care
A flexible spending account (FSA), which is not to be confused with federal student aid, federal financial aid, or a federal loan, is a type of employer-sponsored benefit that allows individuals to set aside a portion of their earnings before taxes to cover qualifying health care expenses, including mental health and dental expenses. This includes routine medical visits, prescriptions, and many forms of mental health care. Here are some of the key features of an FSA:
- Pre-tax contributions: Individuals don’t have to pay taxes on the money they contribute to their FSA, which can lower their overall tax liability.
- The use-it-or-lose-it rule: Most FSAs require individuals to spend the funds within a plan year or risk losing the funds altogether. Some employers offer a grace period or rollover provisions, but they are not universally used and can be limited.
- Employer specifications: While FSAs must follow federal guidelines, some have specific rules, such as eligible expenses, documentation, the rules of a specific flexible spending arrangement, rollover provisions, and grace periods that may differ on an employer-by-employer basis.
When it comes to mental health care, FSAs often cover therapy and counseling, psychiatric care, medications, specialized treatments, and other common mental health care expenses. As a result, FSAs can be the saving grace for many people who are looking for mental health services but can’t afford out-of-pocket costs.
What mental health care services are covered by a flexible spending account (FSA)?
FSAs are designed to help pay for qualified health care expenses, which can include many services related to mental health. According to IRS guidelines, “taxpayers can use FSA funds for qualified medical expenses not covered by their health plan.” In the year 2025, they can contribute up to $3,300 (or double that if they have a spouse). The maximum carryover rate is $660, which is an increase over 2024’s rate.
Beyond the rules stated above, the guidelines don’t specify whether something is or isn’t covered by an FSA. It could be based on an individual’s health coverage. Here are some mental health services that may qualify:
- Individual therapy or counseling provided by a licensed mental health professional, such as a psychiatrist, psychologist, licensed clinical social worker, counsellor, or therapist
- Psychiatric care, including initial evaluations and ongoing medication management
- Prescription medications related to mental health
- Over-the-counter medicines related to mental health, so long as they are recommended by a medical provider and supported by a valid doctor’s prescription
- Cognitive or behavioral health assessments conducted for treatment planning
- Teletherapy or online counseling sessions through platforms like BetterHelp, if the provider is licensed and the service meets the individual’s FSA eligibility criteria
Can a flexible spending account (FSA) be used for online therapy?
Online therapy has become a popular way to receive mental health support, possibly offering greater flexibility and fewer barriers to care than traditional in-person therapy. For individuals using a flexible spending account (FSA), this raises an important question: Is online therapy considered an eligible medical expense?
In many cases, the answer could be “yes”, if the services are provided by a licensed mental health practitioner and meet the individual’s plan requirements. Most FSA administrators follow IRS guidelines, which allow for telehealth and virtual services when they are used to treat diagnosed mental health conditions. These covered services may include live video therapy sessions, phone-based counseling, and text-based therapy platforms.
The effectiveness of online therapy
Studies continue to indicate that online therapy is as effective as in-person therapy and may even be preferred by some users. Mental health care is a complex industry that offers people a path to mental wellness. With options like online therapy and FSAs, more individuals can get the help they need.
The benefits of online therapy
Online therapy can offer flexible, discreet, and timely care, which may be especially helpful for people who have demanding schedules, transportation issues, limited connections to in-person providers, or specific preferences or needs that make in-person therapy difficult or impossible. Being able to attend sessions from home or in a location of their choosing can also help reduce the stress of commuting or asking for time off from work for appointments.
How to find out if mental health care services are covered
Even if a service appears eligible, not all therapy-related expenses are automatically covered under an FSA plan. Ineligible services could include those rendered without a diagnosed medical condition and alternative or complementary therapies. To avoid denied reimbursements or other complications, individuals can take a few steps to confirm whether their mental health care qualifies under their specific plan.
Check with a flexible spending account (FSA) administrator
Each plan may have slightly different requirements and guidelines. Individuals may need to contact their plan provider and comb through their FSA documentation to help clarify what’s covered, what isn’t covered, and what documentation they need to gather before their appointment.
Obtain a letter of medical necessity (LOMN)
For some mental health services, individuals may need a written statement from a licensed medical provider stating that the services are a medical necessity and are necessary to treat a diagnosed health condition.
Keep detailed records
Individuals may want to save invoices, provider credentials, and proof of payment. Even if they use an FSA to pay for the services, having receipts or explanations of benefits on file can be helpful in the event of an audit or reimbursement request.
Ask about specific mental health care services
If a mental health professional accepts flexible spending account (FSA) or health savings account (HSA) payments, they can check with their plan provider to ensure that the service they are providing is covered under their plan.
How to maximize an FSA before the end of the year
FSAs may operate on a use-it-or-lose-it principle. Any funds left unused by the end of the plan year may be forfeited unless the employer offers a grace period. Still, there could be limits in place that may impact how much an individual is able to roll over. Knowing how and when to spend their balance can help individuals avoid losing money and ensure they’re taking advantage of the full value of their account.
- Track the balance: Knowing how much you’ve spent with your FSA or HSA, and subsequently, how much remains of your balance, can prevent surprises when deadlines are fast approaching.
- Review important dates: Some plans follow a calendar year, while others use a benefit year based on the starting date of the plan. Individuals may need to know how their plan works and try to keep track of these dates.
- Schedule sessions ahead of time: If you are able to plan ahead, you can predict how much of your FSA you’ll use in any given year.
- Refill eligible prescriptions or restock supplies: If someone has been prescribed medications for a mental health condition, refilling them before the deadline can help maximize their FSA spending.
Tips for managing an FSA
Managing an FSA may feel like another task on a long to-do list, but a few habits can ensure that individuals are getting the most out of their flexible spending accounts. Here are some tips that may help you stay organized and manage your FSA.
Set reminders
Whether their plan ends in December or follows a different schedule, individuals should mark deadlines in their personal calendars, so they always have those important dates on hand. This can help them avoid any last-minute stress or lost funds.
Save all receipts and documentation
Even if their FSA card works at checkout, individuals may want to keep backup records, just in case their provider requires additional proof later on. This can include therapy invoices, prescription details, and any letters of medical necessity.
Learn the rules, guidelines, and conditions
If a flexible spending account offers reimbursement on certain services after they are rendered, individuals may want to identify those services and find out how to go about reimbursement. The same could apply to all rules associated with their FSA.
Ask questions
If they’re unsure whether something is covered or don’t quite understand how their benefits work, individuals may need to speak to an FSA administrator and learn as much as they can about their plan and what it covers.
How to use FSA/HSA on the BetterHelp platform
Did you know BetterHelp accepts FSA/HSA cards and is recognized as an eligible expense by most providers? Don’t let your dollars go to waste and invest in your mental health before the year ends. For FSAs, remember “use it or lose it”: consider applying remaining funds before the year ends. Because some FSA plans don’t allow subscription charges, try charging your FSA card first; if that method doesn't work, you should be able to pay with a personal card and submit itemized receipts for each session (sessions are usually FSA-approved). To explore using your FSA/HSA funds on online therapy platforms to support your mental health, we recommend checking with your employer/benefits administrator to see if this is a covered expense.
Additional mental health care services available to users with an FSA
While therapy and psychiatric care are commonly known FSA-eligible services, some accounts may also cover a broader range of mental health-related costs. Some of these may require extra documentation, but they can still qualify if they’re used to treat diagnosed conditions. Here are a few examples of additional eligible mental health care expenses:
- Group therapy
- Diagnostic assessments
- Substance misuse treatment
- Medical transportation
Takeaway
What is an FSA vs. HSA?
A flexible savings account (FSA) is employer-owned and follows a “use it or lose it” rule in which unused funds are forfeited each year. Meanwhile, a health savings account is owned by the individual but requires a high-deductible health plan. Both accounts allow individuals to set aside income before it’s been taxed to cover healthcare costs.
How do I spend my FSA money?
Below are a few ways you can spend your FSA funds:
- Vision care, including new glasses or contacts
- Dental care
- First aid supplies
- Hearing aids
- Over-the-counter medication to stock your medicine cabinet
- Certain skincare products
- Menstrual products
- Diabetic supplies
- Smoking cessation products
- Pain relief devices like heating pads
Where can I use my FSA card?
You can use an FSA card at a doctor’s office, dentist’s office, hospital, pharmacy, or vision center. You may also be able to purchase FSA-approved items online, but it’s important to verify that they are FSA-approved before proceeding.
What are the four types of FSA?
The National Institutes of Health (NIH) list three types of FSAs. These include Health Care FSAs, Limited Expense Health Care Account FSAs, and Dependent Care FSAs.
What happens to unused FSA funds?
In most cases, unused FSA funds are forfeited and returned to the employer at the end of the plan year. Sometimes, a grace period may allow individuals to use leftover funds to cover new expenses. An employee should ask their employer about the specifics of their particular plan and whether it’s possible for the employer to repay forfeited funds after completing the plan year.
Are anxiety medications FSA-eligible?
Prescriptions are usually FSA-eligible. Contact your plan administrator for more information and verification about your specific situation.w
What is not covered by an FSA?
Several items that are not typically covered by an FSA include the following:
- Hygiene products
- Lotion
- Low-calorie foods
- Health club membership costs
- Elective cosmetic surgery
- Baby bottles and baby wipes
Can I use my FSA to pay for BetterHelp?
BetterHelp currently accepts HSA/FSA cards, and most HSA/FSA providers recognize BetterHelp online therapy as an eligible expense. BetterHelp connects users with a qualified human therapist who can respond to and treat a variety of mental health challenges. Choosing to sign up for BetterHelp enables you to begin the therapy process and take action to improve your mental health.
Can I use FSA for mental health therapy?
In many cases, an FSA can be used to cover mental health therapy costs as long as the services are considered medically necessary. For instance, an FSA would likely cover therapy for depression but wouldn’t necessarily cover marriage counseling.
Are counseling sessions FSA-eligible?
Counseling sessions are usually FSA-eligible when they are related to the treatment of a mental illness, such as an anxiety disorder. An FSA can usually also cover prescription psychiatric medications.
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