The interest in alternative therapies for mental health has been growing rapidly, and one area that has been gaining significant attention is psychedelic therapy. Psychedelic therapy involves the use of mind-altering substances, often in conjunction with psychotherapy, to treat conditions like depression, PTSD, and anxiety.  As people explore these new therapeutic options, a common question arises: "Can I use my Health Savings Account (HSA) or Flexible Spending Account (FSA) for psychedelic therapy?" This article aims to provide clarity on this topic, examining the current status of psychedelic therapy in relation to HSA and FSA eligibility.
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The Status of Plant-Based Psychedelic Legalization

While there is promising research in this field, it's important to note that many psychedelic substances are still classified as Schedule I drugs under the Controlled Substances Act in the United States, meaning they are not legally recognized for medical use and have a high potential for abuse. 

However, there have been some changes in recent years. At the time this article was published, all plant-based psychedelic substances (mushrooms/psilocybin, ayahuasca, cannabis/peyote, wachuma/san pedro cactus, iboga, etc) have been decriminalized in over nine states and counting: California, Oregon, Washington State, Washington DC, Minnesota, Maine, Michigan and Massachusetts to name a few. 

In addition, when it comes to  synthetic (lab-produced) psychedelics,  the FDA granted "Breakthrough Therapy" designation to MDMA-assisted therapy for PTSD and synthetic psilocybin therapy for treatment-resistant depression and specific chronic, documented mental health conditions, acknowledging their potential as valuable therapeutic tools. 

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The TLDR (Too Long Didn’t Read) on Reimbursement Eligibility

In short: Yes, usually HSA & FSA funds can be used to pay for in-person or online therapy. It will come down to how your psychedelic-assisted therapy is coded. At Catbird, we cannot legally transact (sell) you the psychedelic substance. We do provide resources to handle procurement your own. We offer a therapeutic setting and container while you choose to injest the substance. Our coding is Harm Reduction , which is a type of Therapy, and fully reimburseable.

The rules state that: “Medical or mental health therapy is eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), and health reimbursement account (HRA). Therapy not required for a medical or mental purpose will typically not qualify, such as marriage or family counseling.”

Thus, your psychedelic-assisted therapy must adhere to Decriminalization rulings in your specific county, as well as the Board of Behavioral Sciences protocols: offering your in-person treatment utilizing the acceptable psychotherapy categories, such as Harm Reduction Therapy.

There are some exceptions, especially with the specific therapy coding for Harm Reduction versus Somatic/EMDR versus Psychotherapy etc, so be sure to check your provider’s specific eligibility requirements. You might need to provide a letter of medical necessity from your doctor for your physical or mental health if your provider requests one.

“Read up on the complete rules governing HSA application to therapy. One important note is that you may be required to have a ‘billable diagnosis’ as opposed to ‘general’ life stressors. This would be similar to if you were using an insurance benefit.” - Ashley Ertel, LCSW, BCD, C-DBT.
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Understanding Health and Flexible Savings Accounts

In addition to eligibility, it's important to understand what HSA and FSA accounts are actually used for:

• Health Savings Account (HSA): An HSA is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an HSA are not subject to federal income tax at the time of deposit. HSAs can be used to pay for qualified medical expenses, and the funds roll over and accumulate year to year if not spent.
  
  
• Flexible Spending Account (FSA): An FSA is a tax-advantaged account that allows employees to set aside pre-tax dollars to cover eligible healthcare expenses. FSAs are typically use-it-or-lose-it accounts, meaning any funds not used by the end of the plan year (or grace period, if applicable) are forfeited.

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HSA/FSA Eligibility for Therapy and Health Coaching

The eligibility of health coaching for HSA or FSA reimbursement is not straightforward and depends on several factors:

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Medical Necessity

 To be covered under HSA or FSA, health coaching services typically need to be considered a medical necessity. This usually requires a diagnosis from a licensed healthcare provider and a letter of medical necessity stating that the health coaching is part of a treatment plan for a specific medical condition.

Qualifications of the Health Coach

The IRS guidelines for HSA and FSA eligible expenses often require that medical services be provided by qualified healthcare professionals. Therefore, whether a health coach is considered a qualified provider can impact the eligibility of their services for HSA/FSA reimbursement.

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Type of Service Provided

The specific nature of the health coaching services can also influence eligibility. For example, if the health coaching is primarily nutritional advice for weight loss without a specific medical condition, it may not qualify. Conversely, if the coaching is for managing a specific health condition like diabetes, it is more likely to be considered eligible.
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Steps to Determining HSA / FSA Eligibility

If you're considering using HSA or FSA funds for psychedelic therapy, consider the following steps:

• Consult with your Healthcare Provider: Discuss with your doctor or a licensed healthcare provider whether health coaching is necessary for your specific health condition.
• Obtain a Letter of Medical Necessity: If deemed necessary, obtain a letter of medical necessity from your healthcare provider.
• Verify Company, Coach or Therapy Clinic’s Credentials: Ensure that the health coach is a qualified professional who can provide services that are eligible for HSA/FSA reimbursement.
• Check with Account Administrators: Consult your HSA or FSA administrator for specific guidance on what is covered under your plan.
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Looking Ahead

The landscape of psychedelic therapy is evolving. As more research emerges and potential FDA approvals occur, the eligibility of these therapies for HSA/FSA use could change. Individuals interested in using their HSA or FSA for psychedelic therapy should keep abreast of legal developments and consult with their account administrators and healthcare providers.

Currently, using HSA or FSA funds for psychedelic therapy is largely restricted due to the legal status of most psychedelic substances. However, with ongoing decriminalization efforts, clinical trials, academic research and potential regulatory changes, this may evolve in the future. It's important for individuals considering this therapy to stay informed about legal changes and to consult with professionals for the most current information. The integration of innovative treatments like psychedelic therapy into mainstream healthcare coverage is a complex process, but it reflects the ever-evolving nature of medicine and patient care.
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Disclaimer

This article is for informational purposes only and does not constitute medical or legal advice. Always consult with a healthcare professional and financial advisor for advice on your specific situation.

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