Does Insurance Cover Therapy? What to Know Before Benefits Reset
As the end of the year approaches and insurance benefits reset, many people are considering how to use their insurance benefits before they expire.
If you’ve been thinking about starting therapy, you might be wondering “Does insurance cover therapy?” You might also wonder if now is a good time to start therapy, or if you should wait until January.
For many people, the answer to the first question is yes. Many health insurance plans include some coverage for therapy, though your specific coverage will depend on your insurance plan. As far as timing goes, starting before your benefits reset at the end of the year may be beneficial and save you money in the long run.
Both of these things are worth considering if your benefits reset in January. This post walks through what to look for, so you can decide what timing works best for you.
Does insurance cover therapy?
Specific insurance plans vary, but for many people, insurance does cover the cost of therapy. Having coverage doesn’t mean that therapy will be free, but your cost will be reduced depending on your specific plan.
Your insurance plan may cover therapy, but require that you pay a copay, which is a set amount paid for each visit. Your insurance plan may also have a deductible, which is an amount you pay out-of-pocket every year before your insurance starts to share the cost.
You’ll tend to pay less for therapy if the therapist you see is in-network with your insurance company, meaning they have a pre-existing agreement to accept your insurance. Some insurance plans have session limits that cap how many sessions you can have with a therapist in a given year.
If you’re unsure of your coverage, consult your plan documents, call the number on the back of your insurance card, or ask a therapy practice to check your benefits for you. We also have an article on how to find out if your insurance covers therapy, which walks through each of these options.
Is the end of the year a good time to start therapy?
Depending on your specific plan and how much of your benefits have been used this year, the end of the year can be a good time to start therapy from a cost perspective.
Ultimately, it comes down to your deductible – the set amount you pay “out-of-pocket” each year before your insurance kicks in. If you’ve already met your deductible for the insurance year, therapy sessions will cost less. When your benefits reset in January, your deductible starts over again, which can mean paying more for sessions.
Be sure to consult your insurance plan for specific details. Some insurance plans only use copays for therapy and a deductible doesn’t apply. Some insurance plans run on a different calendar schedule than January to December. Calling your insurance company or asking your therapy practice to check your benefits is the best way to know where you stand.
How to use leftover FSA and HSA money for therapy
Flexible spending accounts (FSA) and health savings accounts (HSA) are specialized accounts that let you set aside pre-tax money for healthcare costs. You can use money from either of these kinds of accounts to pay for therapy, including copays, deductibles, and session fees.
FSA “use it or lose it” rules mean that money left in your account at the end of the insurance year may be forfeited. Some employers will allow you to carry over a limited amount into the following year, but others don’t. If you have a “use it or lose it” FSA, check your balance and deadline now. If you have money left over, scheduling therapy sessions before the deadline is one way to use these funds.
HSA money works differently. It rolls over every year, so there’s no deadline to spend it. You can only contribute to an HSA if you have a high-deductible insurance plan and aren’t enrolled in Medicare or Medicaid.
Questions to ask before your benefits reset
These are some questions you may want to consider before the insurance year ends. Your insurance company, employer/benefits office, and therapy practice can work with you to find the answers.
When does my insurance plan reset? Many plans reset on January 1st, but others don’t. Check your plan to find out when your deductible and session limits start over.
Does insurance cover therapy the same way every year? Insurance plans can change their costs, covered services, and in-network providers from year to year. Check for any changes in your specific plan.
Will my therapist stay in-network? If you plan to continue therapy with the same therapist next year, confirm with your therapist that they are still in-network with your insurance plan.
When is my “use it or lose it” FSA deadline? Consult your employer to learn if they offer a carryover or grace period.
Figuring out your insurance coverage can feel confusing, but you don’t have to do it alone. If you have questions about using your benefits for therapy, our team can help you find answers. Contact us today to ask about using your insurance coverage for therapy before benefits reset.
Frequently Asked Questions
Does insurance cover therapy before I meet my deductible?
It depends on your plan. If your plan has a deductible for therapy, you may pay the full cost of sessions until you meet your deductible. If your plan uses a copay model, you may only pay the copay amount for each visit.
Can I use my FSA or HSA for therapy?
In most cases, yes you can. Therapy is an eligible expense for both FSA and HSA accounts. You can use funds from these accounts for copays, deductibles, and session fees. Specific rules differ by plan, so consult your insurance provider or benefits office for more details.
What happens to my FSA money at the end of the year?
FSA “use it or lose it” means that money left in an FSA account at the end of the year may be forfeited. Some employers allow a partial carryover or grace period. Consult your specific plan for more information.
