All About Health Savings Accounts by Meg Terwilliger
As the insurance biller at Virago Wellness, I truly enjoy helping to make therapy as accessible as possible for the women of Southern Maine. I try to learn all the intricate details about how insurance companies operate and how your policy might help you pay for therapy so that you can get your questions answered and hopefully avoid hassles. In my opinion, one of the many confusing aspects of health insurance is the Health Savings Account (HSA).
If you have a high deductible insurance plan, you may have noticed that sometimes the coinsurance won’t start kicking in until it’s almost time for your policy to renew! When your deductible resets you start all over again chipping away at that deductible. This can be frustrating. But maybe your high deductible plan comes with the option of opening an HSA. I believe this is something worth looking into.
What exactly is a Health Savings Account?
A Health Savings Account (HSA) is a savings account designed for individuals with high-deductible health plans (HDHPs). It can help you save for healthcare expenses while also saving you money on taxes. It works a bit like a regular bank account and often comes with a debit card you can use just like a credit card.
How can an HSA help with out of pocket therapy costs?
Tax-free savings - Contributions to an HSA are tax-deductible which reduces your taxable income. The funds in your HSA grow tax-free which means you won't pay taxes on the interest or investment earnings. And when you use HSA funds for qualified medical expenses, including therapy, the withdrawals are also tax-free.
Lifelong ownership – You own your HSA account forever. Any money contributed to the account while you are insured by a qualifying high-deductible plan will stay in the account and belong to you even after you switch to a non-qualifying plan.
Prioritizing self-care – If anyone has ever advised you to ‘save for a rainy day’, the HSA is an excellent way to do just that. Especially with a high deductible to meet, future-you will be grateful that you are taking steps now to make sure there will be funds available to pay for therapy, and other healthcare expenses, in the months (and years!) ahead.
What Are Qualified Medical Expenses for Therapy?
I am by no means an expert and you should definitely do your own research on this, but I can tell you that individual or group therapy sessions with a licensed therapist at Virago Wellness are qualified medical expenses. Be careful though. If you miss a session and a late fee is charged, this fee is most likely not considered a qualified expense. You have the option of uploading an HSA debit card to your patient portal to cover out of pocket costs for sessions and also uploading a regular debit or credit card to pay any late fees you may accrue.
Getting Started with an HSA
If you're interested in using an HSA to cover out-of-pocket therapy costs, here are some steps to get started:
1. Check your eligibility – Review your health insurance plan to see if you're eligible for an HSA.
2. Choose an HSA administrator to manage your HSA – Research and select a bank, credit union, brokerage, insurance company or third-party administrator that meets your needs.
3. Find out if your employer offers an HSA and whether they can contribute on your behalf.
4. Contribute to your HSA – Set up regular contributions to your HSA to build up your funds.
Taking control of your therapy costs can be a powerful step towards prioritizing your mental health. By leveraging a Health Savings Account, you may be able to save for therapy costs tax-free and make self-care a priority. Remember, your mental health matters. Don't let financial stress hold you back from seeking the therapy you need.
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Meg is the administrative assistant at Virago Wellness.
