How To Accept HSA Payments In Private Practice

As a therapist, embracing health savings accounts (HSA) is not only beneficial for your clients but also for your practice.

By offering the convenience of HSA payments, you make mental health services more accessible and affordable for potential and current clients. This may expand your client base and promote mental well-being.

But how can you integrate these payments seamlessly into your practice?

And how can you ensure a smoother, more inclusive experience for your clients?

And what are HSAs anyway?

Understanding Health Savings Accounts

You may be well-versed in the intricacies of a health savings account, or you may be new to the idea. So, let’s cover the basics first.

An HSA is a tax-advantaged savings account for individuals with high-deductible health plans (HDHPs). This specialized account allows people to set aside pre-tax income for qualified medical expenses.

What are qualified medical expenses?

The Internal Revenue Service states that, regarding HSAs, “Medical expenses must be primarily to alleviate or prevent a physical or mental disability or illness. They don’t include expenses that are merely beneficial to general health.”

In other words, payment for therapy is acceptable if it is to treat a mental disability or a diagnosed mental illness — for example, substance abuse disorder, alcohol use disorder, tobacco use disorder, anxiety disorders, clinical depression, bipolar disorder, eating disorders, post-traumatic stress disorder, and schizophrenia may be covered. However, marriage and family counseling may not.

Some conditions or therapy may only be covered with a letter of medical necessity (LOMN).

The best way to confirm coverage is to ask your client to check with their HSA fund. This is worth the effort, as using an HSA account to pay for an unqualified expense attracts federal income tax and a 20% tax penalty for those under 65.

HSAs: Growing In Popularity

With tax-deductible contributions, tax-free earnings, and tax-free withdrawals when spent on qualified medical expenses, there’s little wonder the popularity of HSAs continues to grow.

People can reduce their taxable income while setting aside funds for future medical expenses. They can also use HSAs to help offset the rising cost of healthcare. And they’re portable: not tied to a specific employer.

The 2022 Year-End Devenir HSA Research Report survey found that “HSA contribution and withdrawal activity remains strong.” Account holders are saving and using their accounts more than the prior year.

Offering this payment option, then, fits neatly into a popular, growing trend.

Compliance When Accepting HSA Payments

Everything you do as a therapist must be legally compliant. Accepting HSA payments is no different. But how can you cross your t’s and dot your i’s?

As a therapist, you must understand how to accept HSA payments according to HSA regulations to provide a seamless, legally sound payment process.

Firstly, verify that your services are eligible for HSA reimbursement. Therapy sessions for mental health purposes are typically considered qualified medical expenses. Check with your tax consultant to confirm the eligibility of services, or review the IRS guidelines for details.

Secondly, maintain detailed records of each HSA transaction. This includes the client’s name, date of service, type of service provided, and the amount charged. These records serve as a crucial backup in case of an audit or if a client needs to substantiate their HSA expenses.

Thirdly, communicate transparently with your clients about using their HSA for payments. Provide clear instructions on initiating the transaction, what information they need, and how the payment will be reflected on their HSA statement.

Finally, ensure that your billing system can handle HSA payments securely. Partner with a reputable payment processor or use a reliable healthcare billing platform to safeguard sensitive financial information and streamline payment.

Setting Up HSA Payment Processing

Ready to set up your HSA payment processing?

It’s not as hard as you might imagine.

You can accept payment by swiping your clients’ HSA debit card through your credit card reader, as you would a credit card. Or by providing a Super Bill for clients to submit to their fund.

When people have an HSA account, they have or can get, a linked debit card that can only make payments to approved healthcare providers. Yes, like you! Encourage your tribe to get a card.

Contact your payment processor. Ask if you can accept HSA payments automatically or need to add a category like “medical services” to your account. If you can accept payments, great! If not, ask to update your account so you can accept payments. Then you should be good to go.

You can also provide your client with a Super Bill: a detailed receipt that can be submitted to their HSA fund to reimburse their payment.

Want to know more? Read the article, What is a Super Bill, and How Do They Work?

Educate Your Clients About HSA Accounts And Payment Acceptance

Do your clients know about HSA accounts, their tax-free benefits, and their ability to use them in your practice?

Some won’t. So, it’s helpful to educate your tribe about the existence and potential advantages of HSA accounts.

Provide a clear explanation of what an HSA is and how it works. Explain that it’s a tax-advantaged savings account designed to cover qualified medical expenses. Yes, it may save them money by lowering their taxable income. Also, explain that mental health services, including therapy sessions, are typically considered eligible expenses. This information helps your clients make informed decisions about the financial options available to fund their care.

Walk your clients through the process of using their HSA for payments. Offer step-by-step instructions on initiating the transaction, how the payment will be reflected on their HSA statement, and any other necessary information.

By demystifying the process, you ease clients’ potential confusion or fear about using their HSA for mental health services.

You can create a brochure with resources and references for further information on HSAs. Direct your clients to reputable sources, such as the IRS website, educational materials from established financial institutions, or to speak to their tax expert — comprehensive information will help them make an educated decision.

Get to know the frequently asked questions around HSAs so you can guide your tribe. Welcome any questions or concerns people may have about the process. Create a supportive environment where they feel comfortable discussing financial matters related to their therapy.

Also, provide clear signage to inform people that you accept HSA funds.

The Benefits For Therapists Of Accepting HSA Payments

Accepting HSA payments not only benefits your clients but can also strengthen your practice. By offering flexible payment options, your clients can make better decisions.

Providing this option may also foster rapport, as your clients can use their HSA funds for the treatment they value most. This approach not only enhances the accessibility of your services but demonstrates your commitment to their overall well-being.

As mentioned above, integrating HSA payments into your practice can be straightforward with the right tools and resources.

Clients who can quickly pay with their HSA cards are likelier to do so. Providing clear instructions and resources on using HSA funds will further streamline the payment process and enhance the overall client experience.

Navigating HSA Reimbursement

As with all things finances, you need to be on top of HSA reimbursements.

1. Speak to your payment processor.
2. Ensure you’ve set the process up correctly.
3. Ask how long the receipt of HSA payments should take and if there’s anything you should know about the process. Reimbursement should be simple.
4. Ensure they offer a secure payment processing system that seamlessly handles HSA transactions.

Streamlining the payment process is essential, as is providing top-notch security for sensitive financial information.

Remember, also stay informed about HSA regulations and guidelines. The IRS periodically updates the rules about HSA contributions and eligible expenses. This may impact claims and payments. Knowing about changes from the get-go allows you to remain compliant and paid and provide current information to your clients.

The HSA Takeaway

Accepting HSA payments benefits your clients and your practice. By providing this convenient option, clients have another way they can fund much-needed therapy.

When it comes to payment flexibility, both HSA and FSA cards are essential tools that allow your clients to utilize their tax-advantaged accounts for covering therapy expenses. By accepting HSA or FSA payments, you broaden your payment options and cater to a wider range of clients, ensuring that heath spending accounts and flexible spending accounts are both valuable assets in providing accessible and beneficial therapy services.

With the right tools and knowledge, accepting HSA payments can be a straightforward and valuable benefit to your practice.

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