Can I use my HSA or FSA funds for physical therapy services?
Yes you can.
Cost of medical care is on the rise and reimbursement, especially for mental health, behavioral health, and rehabilitative services is declining. As a result, the quality-of-care patients receive is decreasing as providers are forced to see more patients in a day to stay afloat.
Not only is this frustrating to patients, but it also slows down their recovery process and stretches out the treatment time, keeping people in the system longer. The longer you’re in the system, the more out-of-pocket expenses you pay.
Fortunately, tools like Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) can help make medical expenses like physical therapy more affordable.
This is the main reason Monarch Physical Therapy is an out-of-network clinic: We wanted to get back to providing high-quality care to our patients so they could get back to their active lifestyle without unnecessary delays caused by their insurance company’s red tape.
Because their insurance company isn’t dictating the care they receive here, our patients don’t waste time laying around with an ice pack or doing exercises they could do on their own time. They aren’t handed off to techs or told to pedal a bike while their therapist treats other patients at the same time. Every patient receives 1-on-1 care for their entire hour-long treatment session and thus needs fewer visits overall. It’s a win-win for everyone.
At first, it can be discouraging to learn your physical therapist doesn’t accept your insurance plan.
However, when you break down the numbers (especially if you’re using an HSA or FSA to pay for therapy), it’s surprising to learn you may actually save money with private-pay physical therapy clinics.
Let’s take a look at why it’s beneficial to use an HSA or FSA to pay for physical therapy services.
What is a Health Savings Account (HSA)?
A Health Savings Account (HSA) is similar to a savings account you’d have at your bank, except funds deposited in an HSA can only go towards paying for medical expenses. Typically, an HSA is beneficial when your health insurance plan has a high deductible, as you can use HSA funds to pay medical bills until your plan’s deductible is met and your healthcare coverage goes into effect. Another perk of an HSA is that funds you deposit into that account do not disappear at the end of the year, unlike their cousin, the Flexible Spending Account (FSA). Medicare beneficiaries are not eligible to open an HSA.
Health Savings Account Rules
- The funds in your HSA can be used to pay for “qualified medical care expenses” incurred by you, your spouse, and your dependents.
- The IRS establishes what is and what is not a “qualified medical care expense”, detailed in IRS Publication 502, Medical and Dental Expenses.
- According to the IRS: “Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.”
Can I use my HSA for Physical Therapy?
Yes, you can.
Since physical therapy services, like the ones provided at Monarch Physical Therapy, fall under a medical expense that treats structures and functions of the body, you are able to use your HSA funds to pay for treatment from a physical therapist for yourself, your spouse, or your dependents.
Monarch physical therapy accepts HSA’s and provides you with a receipt for service in case it’s requested by your HSA provider.
What is a Flexible Spending Account (FSA)? How does a Flexible Spending Account work?
A Flexible Spending Account (FSA) is similar to a savings account you’d have at your bank, except funds deposited in a FSA can only go towards paying for medical expenses. Unlike an HSA, you’re only able to sign up for an FSA if your employer provides one for you. The biggest drawback of this account is if you don’t use your funds by the end of the year, you lose them (with a few exceptions).
Can I use my FSA for physical therapy?
Yes, you can.
Since physical therapy services, like the ones provided at Monarch PT, fall under a medical expense that treats structures and functions of the body, you are able to use your FSA funds to pay for treatment from a physical therapist for yourself, your spouse, or your dependents.
Monarch PT accepts FSA’s and provides you with a receipt for service in case it’s requested by your FSA provider.
If you’re in pain towards the end of the year, it’s a smart move to use your FSA funds for physical therapy services before you lose them.
How can using your HSA or FSA for physical therapy save you money?
Depending on your tax bracket, when you use your HSA or FSA funds to pay for physical therapy services you’re paying ~30-50% less than what you would if you paid with cash from your checking account.
Let’s assume you’re in the 28% tax bracket and our current rate is $165 per treatment session:
Federal Tax Savings:
28% of $165 = $46 saved by using HSA or FSA funds
Social Security/Medicare deductions:
7.65% of $165 = $12 saved by using HSA or FSA funds
$46 + $12 = $58 total savings
That brings your relative cost to $107 per session.
Now let’s look at this investment over time, compared to an In-Network PT:
30 minute treatment sessions
x $75 co-pay
x 3 sessions per week
x 4 weeks
$900 invested for 360 minutes of divided “care” for 4 weeks
Monarch Physical Therapy (Out-of-Network PT):
60 minute treatment sessions
x 2 sessions per week
x 3 weeks
$642 invested for 360 minutes of 1-on-1 treatment for 3 weeks
That’s 25% savings by going to an Out-of-Network PT. You also need less visits per week and get back to your life one week faster.
The Bottom Line
Not only can you use your HSA and FSA funds for physical therapy services, it’s a smart choice and can save you 30-50% on these medical expenses.
If you’re going to invest your time and hard-earned dollars in a physical therapy clinic, it literally pays to consider what type of care you’re paying for.
If you’re looking for a high-quality physical therapy clinic in the Fredericksburg area that can help you get out of pain and back to your active lifestyle, you can click on our website and book an appointment, or just call us at 830-431-0773
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