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  • Jessica McIninch

Can You Use Your HSA Account for KAP? Insights and Options for Funding Ketamine-Assisted Psychotherapy



The integration of psychedelic therapies like ketamine-assisted psychotherapy (KAP) into mental health treatment offers new hope for individuals seeking relief from persistent mental health challenges. Using an HSA to fund KAP can make this treatment more accessible, providing a financial strategy to support your journey. Whether through HSAs, FSAs, or out-of-pocket payments, the goal remains to make transformative therapies like KAP accessible to those in need.


The Flexibility of HSAs

Health Savings Accounts (HSAs) are designed to provide individuals with a tax-advantaged method to save for medical expenses. This includes a variety of treatments and therapies not typically covered by traditional health insurance. Given their flexibility, HSAs may cover the costs of KAP, which is increasingly recognized for its efficacy in addressing conditions like depression, anxiety, and chronic pain.


Ketamine Treatment: A Qualified Medical Expense?

Ketamine's use in treating severe mental health conditions has grown significantly despite its classification as an "experimental" therapy by most insurance companies. However, the Internal Revenue Service (IRS), which oversees HSA regulations, allows these funds to be used for qualifying medical expenses. Since KAP is administered for diagnosable conditions under the care of licensed healthcare professionals, it generally qualifies as a reimbursable expense under HSAs. Flexible Spending Accounts (FSAs) also offer similar tax-advantaged benefits for medical expenses and may be used for KAP treatments.


Navigating HSA Use for KAP

  • Verify with Your HSA Administrator: Some HSAs only cover medically necessary treatments, while others offer more flexible coverage. Before proceeding with KAP and expecting coverage through your HSA, confirm the eligibility of such treatments with your HSA provider. 

  • Reimbursement: pay out-of-pocket and seek reimbursement from your HSA by submitting the necessary receipts and documentation.

  • Maintain Records: Request records of all treatments, receipts, and communications related to your KAP and HSA expenditures. This documentation may be necessary for reimbursement and compliance with tax regulations.


The Path Forward

By harnessing the financial tools available, such as HSAs, individuals seeking KAP can more effectively navigate the costs associated with this promising therapy. Consult with your HSA administrator and healthcare provider to ensure your treatment aligns with your financial planning and healthcare needs.


Sources

Internal Revenue Service. (2024, February 23). Frequently asked questions about medical expenses related to nutrition, wellness, and general health. IRS. Retrieved from https://www.irs.gov/individuals/frequently-asked-questions-about-medical-expenses-related-to-nutrition-wellness-and-general-health


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