HSA question - marriage counselor "accepts" it

[lust2hart]

DH and I do a marriage counseling session every couple of months. When we first started, our counselor told us that the practice does not accept insurance but it does accept HSAs. My understanding is that whether they accept HSAs is irrelevant, as marriage counseling is not an HSA-eligible expense. So we've always just paid out of our regular budget and not with our HSA because I didn't want any issues. Well, the last time we did counseling, I guess DH paid with our HSA card. So now I'm looking into it again. And, yes, on the counseling practice's website it says: "We do not accept insurance. We do accept HSA and flex spending." But again, just now I pulled up the list of eligible and noneligible HSA expenses, and marriage counseling is on the noneligible list. See question #7: www.irs.gov/individuals/frequently-asked-questions-about-medical-expenses-related-to-nutrition-wellness-and-general-health

Am I missing something? Or is the practice just wrong, and they're (maybe unknowingly) putting their clients in a tough spot where, if they're ever audited, they'd have to repay the HSA for all the times they used those funds for something that was ineligible?  

[gretchenindisguise]

Do they do more than marriage counseling?

My guess is that they are unknowingly wrong and not understanding its excluded for marriage counseling.

[lust2hart]

Nov 8, 2024 15:49:19 GMT -5 gretchenindisguise said:

Do they do more than marriage counseling?

My guess is that they are unknowingly wrong and not understanding its excluded for marriage counseling.

Yes, they do individual counseling as well. 

[lust2hart]

Nov 8, 2024 15:50:30 GMT -5 lust2hart said:

Nov 8, 2024 15:49:19 GMT -5 gretchenindisguise said:

Do they do more than marriage counseling?

My guess is that they are unknowingly wrong and not understanding its excluded for marriage counseling.

Yes, they do individual counseling as well. 

Their website has an FAQ page, with "Why don't you accept insurance?" as one of the questions, and their answer is: 

There are several reasons. First, most insurance plans do not cover as much mental health services as people would expect. Second, because insurance plans are considered only for “medical” problems, and there is a lot of confusion about the nature of “mental” health issues, all plans significantly limit mental health treatment, whether by diagnosis, number of appointments, types of therapy, etc. For example, we know of no medical health insurance plan that covers relationship issues such as couples therapy, and the same is true for mild expressions of depression and anxiety.

So, yeah. It seems like maybe they don't realize that the IRS has stipulations on HSA funds. 

[waverly]

lust2hart , My guess is that the practice is wrong. However, does your HSA allow for the charge to go through? And have never said anything?

For my DH's FSA he has to submit receipts and be reimbursed, so the company benefits manager would just deny anything that is not eligible.  So I guess I am surprised that the HSA hasn't said anything to you all.  

[lust2hart]

Nov 8, 2024 16:27:38 GMT -5 waverly said:

lust2hart , My guess is that the practice is wrong. However, does your HSA allow for the charge to go through? And have never said anything?

For my DH's FSA he has to submit receipts and be reimbursed, so the company benefits manager would just deny anything that is not eligible.

Our session was 10/23, and I haven't received any notification that there's a problem. I need to doublecheck when I get home to see if I have any messages in my MetLife portal. But my understanding is that it's not company-specific; the HSA is an IRS thing, and the IRS determines what is and is not eligible. Would love to know if that's wrong, though! 

[definitelyO]

I cannot tell you how many times I've found medical practices to be wrong about H.SAs and high deductible health plans. It's frustrating that they give me wrong information (but I know it's wrong b/c benefit plans are part of my job) but more so that they lead other patients wrong.

[waverly]

Nov 8, 2024 16:30:18 GMT -5 lust2hart said:

Nov 8, 2024 16:27:38 GMT -5 waverly said:

lust2hart , My guess is that the practice is wrong. However, does your HSA allow for the charge to go through? And have never said anything?

For my DH's FSA he has to submit receipts and be reimbursed, so the company benefits manager would just deny anything that is not eligible.

Our session was 10/23, and I haven't received any notification that there's a problem. I need to doublecheck when I get home to see if I have any messages in my MetLife portal. But my understanding is that it's not company-specific; the HSA is an IRS thing, and the IRS determines what is and is not eligible. Would love to know if that's wrong, though! 

I'm not saying it is company specific.  I'm saying that due to the reimbursement method, our company makes sure everything is IRS approved. 

If our company approves it, then I probably wouldn't be all that worried about an IRS audit.  But I am not an expert on IRS HSA audits.

[mccallister84]

The HSA works just like a credit card. Once I used it getting a prescription at CVS when I had other things I knew weren’t HSA eligible on it. They assured me the card would only work for the HSA Items so I did not need to do two transactions. That was not true. I don’t remember how we handled it - I think we just reported it on our taxes at the time- but I would not trust the “just because it went through it’s okay” advice.

I’m sure it is pretty common to use your HSA card accidentally for non HSA eligible things. There’s probably an FAQ that explains what to do.

[eb777888]

Nov 8, 2024 17:12:09 GMT -5 mccallister84 said:

The HSA works just like a credit card. Once I used it getting a prescription at CVS when I had other things I knew weren’t HSA eligible on it. They assured me the card would only work for the HSA Items so I did not need to do two transactions. That was not true. I don’t remember how we handled it - I think we just reported it on our taxes at the time- but I would not trust the “just because it went through it’s okay” advice.

I’m sure it is pretty common to use your HSA card accidentally for non HSA eligible things. There’s probably an FAQ that explains what to do.

I was just coming in here to say this. Exact same thing happened to me, only it was at a Walgreens.

[jwright]

You can use HSA funds for non-eligible items, you will just get taxed on it. When you complete your tax return, you will report how much in distributions you took from the HSA account and also how much you had in qualified medical expenses. If those are not equal then you will need to report it. It's all the same to the recipient of the funds.

[katieb4tom]

Is this a difference between HSA and FSA? Because my FSA always only deducted the eligible items from the total, whereas my HSA has covered the entire Target purchase (ugh!)

[lust2hart]

Nov 8, 2024 19:05:59 GMT -5 jwright said:

You can use HSA funds for non-eligible items, you will just get taxed on it. When you complete your tax return, you will report how much in distributions you took from the HSA account and also how much you had in qualified medical expenses. If those are not equal then you will need to report it. It's all the same to the recipient of the funds.

Ahhh, YES. This is what I was missing. I had gotten it into my head that “ineligible” meant forbidden. Thank you!

[jlt19]

FSA and HSA are very different. My FSA (for dental) reimbursement requires receipts, where my HSA does not. It doesn’t even ask for details, all of that is optional. Same company running them. I’d just pay the place OOP and reimburse myself.

I do write in a note like “Q2 copays” and keep a spreadsheet myself, but hasn’t been questioned for the past 3 years.

[sandandsea]

I would ask the practice. Maybe there is a tax court case or something that supersedes the FaQs on the website. Or maybe they code it as mental illness help vs marriage counseling so that it “counts”. I’d just ask them and say you’re going through open enrollment now and want to be sure for next year since you were reading up about the HSA.

[sent]

Nov 9, 2024 11:54:56 GMT -5 sandandsea said:

I would ask the practice. Maybe there is a tax court case or something that supersedes the FaQs on the website. Or maybe they code it as mental illness help vs marriage counseling so that it “counts”. I’d just ask them and say you’re going through open enrollment now and want to be sure for next year since you were reading up about the HSA.

After reading the IRS link in this thread, my guess is they code parts of the visits as diagnosable conditions versus marriage counseling. They probably got tired of people asking to pay with their FSA/HSA and having to say "no." Very few people will be understanding that the reason is "the IRS says so." Instead people get mad that they can't use this money they have on their card, especially for those people whose employers give them FSA/HSA money as a job perk so it's not even their own paycheck money. Also some people might not be as likely to do the counseling if they have to take money out of their grocery budget to pay for it rather than using the FSA/HSA.

[beerlover]

This reminds me of one time my dad paid for a very expensive dinner when we were all in CA with his HSA card, lol. He realized it right after, thankfully, and the restaurant was able to reverse the charges and he gave them his actual credit card.

[lust2hart]

Nov 8, 2024 19:48:24 GMT -5 lust2hart said:

Nov 8, 2024 19:05:59 GMT -5 jwright said:

You can use HSA funds for non-eligible items, you will just get taxed on it. When you complete your tax return, you will report how much in distributions you took from the HSA account and also how much you had in qualified medical expenses. If those are not equal then you will need to report it. It's all the same to the recipient of the funds.

Ahhh, YES. This is what I was missing. I had gotten it into my head that “ineligible” meant forbidden. Thank you!

jwright, is this something I need to keep track of, or will the IRS / my HSA company send me documentation that splits out eligible vs. ineligible purchases? 

[sent]

Nov 11, 2024 10:15:57 GMT -5 lust2hart said:

Nov 8, 2024 19:48:24 GMT -5 lust2hart said:

Ahhh, YES. This is what I was missing. I had gotten it into my head that “ineligible” meant forbidden. Thank you!

jwright , is this something I need to keep track of, or will the IRS / my HSA company send me documentation that splits out eligible vs. ineligible purchases? 

My understanding is this is something you track. I have had an HSA for at least 5 years now and neither the HSA company nor the IRS has ever sent me anything about the purchases we make with the money. 

I also feel that the chances of being audited for accidental misuse of one of these accounts is extremely low yield for the IRS. You can't contribute more than about $8K to them annually and only a small portion of people with employer sponsored health insurance even qualify for one. More people with employer sponsored health insurance likely qualify for FSAs which are their own scam with little to no rollovers of the money people put into them. HSAs would probably need to get to Peter-Thiel-Roth-IRA levels before these things become national news.

[jwright]

Nov 11, 2024 10:15:57 GMT -5 lust2hart said:

Nov 8, 2024 19:48:24 GMT -5 lust2hart said:

Ahhh, YES. This is what I was missing. I had gotten it into my head that “ineligible” meant forbidden. Thank you!

jwright , is this something I need to keep track of, or will the IRS / my HSA company send me documentation that splits out eligible vs. ineligible purchases? 

You need to keep records.  Even if you only used the HSA for eligible items, you could be selected for audit and you'd need to substantiate the qualified medical expenses. 

The IRS is not combing through your drug store receipts to determine what's what. 

[livinitup]

I keep having my post eaten. (Does it occasionally skip for other people and wipe out what you write?)

1- A few years ago, we attended counseling as a couple. The practice was super duper legit & clinical. One of us was chosen to be the “target” patient for insurance purposes and file keeping.

2- We have both had work place HSA + high deductible plans for years. Works great (as best as insurance plans go).

3- At the end of the year, we get printouts of our total Rx bills/cost for the whole year. That gives us a good, all in one place, record of Rx costs. And we keep bigger receipts like eye glasses and medical bills. It covers our expenses for the year. Plus some. On good years, we have a bunch of money in savings (the saving account does not expire & it stays with me through job changes.)