Did you know that your Flexible Spending Account (FSA) or Health Savings Account (HSA) might cover hypnotherapy? If you're exploring hypnotherapy for support with issues like anxiety, smoking cessation, weight management, or even chronic pain, your healthcare spending account could be a helpful way to pay for it—but there are a few steps to follow.
First, What Are FSAs and HSAs?
FSA (Flexible Spending Account): Offered by employers, an FSA lets you set aside pre-tax dollars to pay for qualified medical expenses.
HSA (Health Savings Account): Available to those with high-deductible health plans (HDHPs), an HSA also lets you use pre-tax dollars for qualified healthcare costs, with the added bonus of rolling over unused funds from year to year.
Both accounts are designed to help you save money while taking care of your health—and yes, that can include services like hypnotherapy, if certain conditions are met.
Is Hypnotherapy an Eligible Expense?
Yes—with a Letter of Medical Necessity (LMN)
The IRS considers hypnotherapy a potentially eligible medical expense under FSAs and HSAs, but it must be prescribed or recommended by a licensed medical professional to treat a specific medical condition.
To qualify, you’ll need:
A Letter of Medical Necessity (LMN) from a doctor or licensed healthcare provider.
The LMN must clearly state:
The specific medical condition being treated (e.g., anxiety, chronic pain, insomnia).
That hypnotherapy is a recommended treatment.
The duration and frequency of the recommended treatment (e.g., weekly sessions for 10 weeks).
Common Conditions That May Qualify
Hypnotherapy might be approved for treatment of:
Anxiety or depression
Insomnia or sleep disorders
Irritable bowel syndrome (IBS)
Chronic pain
Post-traumatic stress disorder (PTSD)
Substance use or smoking cessation
Weight loss for health-related reasons (e.g., obesity)
- It’s important to note: hypnotherapy used purely for personal development, motivation, or entertainment will not be covered.
How to Use Your FSA or HSA for Hypnotherapy
Here’s a step-by-step guide:
1. Get a Letter of Medical Necessity
Ask your primary care doctor, therapist, or another licensed provider to write you a letter stating the need for hypnotherapy. Be sure the letter includes the elements mentioned above.
2. Find a Qualified Hypnotherapist
Choose a provider who:
Is a licensed mental health professional or certified hypnotherapist.
Can provide detailed receipts showing the service provided, dates, and cost.
Tip: Ask if your hypnotherapist has experience working with clients who use FSAs or HSAs. They may already have a system in place for documentation.
3. Pay with Your FSA or HSA Card (or Submit for Reimbursement)
You can either:
Pay directly using your FSA/HSA debit card if your provider accepts it, or
Pay out of pocket and submit receipts, along with your LMN, for reimbursement from your FSA or HSA account.
Keep copies of all documentation in case of an IRS audit.
Tips for a Smooth Process
Check with your plan administrator: Every FSA or HSA provider may have slightly different documentation requirements.
Renew your LMN each year if you continue treatment across calendar years.
Track sessions carefully: Keep all receipts, session notes, and a copy of your LMN for your records.
Use it or lose it (FSA): FSA funds often expire at year-end, so plan ahead if you want to use them for hypnotherapy.
Sources:
https://www.healthequity.com/fsa-qme
https://www.goodrx.com/insurance/fsa-hsa/mental-health-expenses
https://www.fsafeds.gov/explore/hcfsa/expenses?take=100&skip=100
https://www.cigna.com/individuals-families/member-guide/eligible-expenses#E-L
https://livelyme.com/whats-eligible/hypnosis