Is Sleep Training Covered under FSA or HSA?
Many sleep-deprived parents who need help with getting their babies into a sound sleep cycle have been reaching out to sleep training consultants like myself.
Whether it’s the cry-it-out or another gentle sleep training technique, all of these methods can help parents remember what it was like to sleep in a horizontal position for eight hours every night.
But did you know that my services are HSA and FSA eligible? That’s right!
More employers every year are moving to a high-deductible HSA/FSA plans. They’ve finally realized that for moms and dads to be more productive at work, they need better sleep.
Let me explain the details:
What is FSA?
For those of you who don’t know, Flexible Spending Account (FSA) is a health plan that you can use to pay for copayments, deductibles, medical expenses, and more.
Think of it this way: it’s an exclusive account in which you put money that you can use to pay for specific out-of-pocket health care costs.
The best thing about FSA is that you don’t pay taxes on this money.
If you know that you will have some out-of-pocket medical expenses, then FSA is useful to have.
It’s important to note that your employer may contribute to your FSA, but they’re not obliged to.
Another information to remember is that FSAs have a limitation of $2,650 per year per employer. If you’re married, your partner can also put up to $2,650 in an FSA with their employer. In general, you must use the money in an FSA within the plan year.
How can you use FSA for sleep training?
Now that we touched upon the basics of FSA let’s talk about how you can use FSA for sleep training services.
Many health care costs related to raising a child are FSA-eligible. Some of these costs include:
Visits to pediatrician
Over-the-counter medicines
Antibiotics
Sleep training services
What you need to do is add your child to the account as a dependent.
As the sleep training industry is relatively new, there are a few ways how you can be eligible for FSA. The expenses of sleep training may be covered under medical care for a newborn or under health institute fees. The health institute fee category includes the costs of health-related courses, workshops, retreats, and more.
To have your sleep training costs approved for FSA, you need to:
Get in touch with your FSA administrator before hiring a sleep trainer. Your FSA administrator will inform you of what paperwork will be required.
You may need to issue a letter of medical necessity (LSN) that you can get from your pediatrician.
Call your pediatrician and ask how you can get the letter. I’m sure they will be happy to help.
You may be required to prepay for sleep consulting and send your receipt to FSA. I’ll provide you with the receipt, and the FSA will then reimburse you for your costs.
What is HSA?
Health Savings Account (HSA) is another way for you to save for medical expenses and reduce your taxable income.
You can qualify for HSA if you’re enrolled in a high-deductible health insurance plan.
An employer can offer high-deductible health plans that also provide HSA. If you have an HSA through your employer, you can always set up automatic contributions directly from your payroll to your HSA account.
If your current plan doesn’t offer HSA, you can open a separate HSA account if you have a qualifying plan.
How can you use HSA for sleep training?
In addition to FSA, you can also use your HSA debit card to pay for your sleep training services.
It’s up to you how much you’ll contribute to your HSA account each year. However, keep in mind that there’s a government-mandated maximum. But unlike with FSA, the money in your HSA account will never expire.
After you sign up for an HSA account, you’ll receive a debit card or checks that are linked to your HSA balance.
Once you have an HSA card, you pay for eligible medical expenses with it.
In other words, when paying for your sleep training services, you can use the HSA debit card to pay for the expenses.
The best part is that you don’t pay tax on those withdrawals that you withdraw for eligible expenses.
Overall, if you’re eligible for an HSA/FSA account, don’t hesitate to get one, especially if you know that you’ll have medical expenses in the months to come.
