Using HSA or FSA to Pay for TMS Therapy

Is TMS therapy HSA/FSA eligible?

Yes. TMS is a qualified medical expense under IRS Publication 502. It’s FDA-cleared, prescribed by a physician, and eligible for payment or reimbursement through both Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA).

That covers all FDA-cleared uses — Major Depressive Disorder and Obsessive-Compulsive Disorder.

How much can you actually save?

Using pre-tax dollars gives you a discount equal to your marginal tax rate:

Add FICA savings (7.65% for most employees) and the real discount is even bigger. On a $10,000 course, you could save $3,000+. That’s real money back in your pocket.

HSA rules for TMS

Health Savings Accounts are for people enrolled in a High Deductible Health Plan (HDHP).

• 2026 contribution limits: $4,300 (individual) / $8,550 (family)
• Funds roll over year to year. No “use it or lose it”
• Can be invested and grow tax-free
• Pay directly with your HSA debit card at the TMS clinic
• Reimburse yourself if you pay out of pocket first — keep the receipt and submit for reimbursement whenever you want (there’s no deadline)

The move most people miss: pay now, reimburse later

Got an HSA balance that’s invested and growing? Pay for TMS out of pocket and hang onto the receipt. You can reimburse yourself from your HSA years down the road — letting those funds grow tax-free in the meantime. It’s one of the best HSA strategies out there, and most people never hear about it.

FSA rules for TMS

Flexible Spending Accounts are employer-sponsored pre-tax accounts.

• 2026 contribution limit: $3,200
• Use-it-or-lose-it: Funds generally expire at the end of the plan year (some employers offer a grace period or $640 rollover)
• Plan ahead: If you know TMS is coming, elect a higher FSA contribution during open enrollment
• Pay directly with your FSA debit card or submit receipts for reimbursement

Timing trick for FSA

FSA funds are available on day one of your plan year, even before you’ve contributed the full amount. If your plan year starts January 1 and you elect $3,200, you can use the entire $3,200 in January — even though only one month of payroll deductions has happened. That’s useful if you have a big TMS expense early in the year.

Letter of medical necessity

Some HSA/FSA administrators want a Letter of Medical Necessity (LMN) from your prescribing physician. It should include:

1. Your name and date of birth
2. Diagnosis (e.g., Major Depressive Disorder, ICD-10 code F33.1)
3. Statement that TMS is medically necessary
4. Confirmation that TMS is FDA-cleared
5. Estimated cost and number of sessions
6. Physician signature and credentials

Ask your TMS clinic for this. They write them all the time. Most HSA custodians (Fidelity, HealthEquity, Optum Bank) don’t require the letter upfront but may request it if they audit your account.

How to submit claims

Paying with your HSA/FSA debit card

• Swipe at the clinic front desk like any debit card
• The transaction codes as a medical expense automatically
• Keep the receipt and Explanation of Benefits (EOB) in case of audit

Paying out of pocket and seeking reimbursement

1. Pay with a personal credit card or check
2. Get an itemized receipt: provider name, date, description of service, amount
3. Log into your HSA/FSA portal and submit a reimbursement claim
4. Upload the receipt and LMN if requested
5. Reimbursement typically arrives in 5-10 business days

Combining HSA/FSA with insurance

HSA and FSA funds cover any out-of-pocket medical cost, including:

• Deductibles: Use HSA/FSA to pay your annual deductible before insurance kicks in
• Copays: Pay your per-session TMS copay with pre-tax funds
• Coinsurance: Owe 20% per session? HSA/FSA handles that
• Denied claims: Even if insurance says no, HSA/FSA can still cover the full cost. IRS eligibility has nothing to do with insurance decisions

That last point is worth repeating. Your insurer denies TMS, but your doctor prescribed it? Your HSA/FSA still works.

Common mistakes to avoid

1. Not electing enough FSA during open enrollment. If TMS is on the horizon, bump up your FSA election. You can’t change it mid-year without a qualifying life event
2. Missing the FSA deadline. Schedule TMS sessions before your plan year ends so you don’t forfeit funds
3. Not keeping receipts. The IRS can audit HSA distributions. Keep receipts indefinitely
4. Assuming HSA/FSA only covers the insurance gap. Even if insurance denies your claim entirely, HSA/FSA can pay for TMS as long as a physician prescribed it
5. Using a Limited Purpose FSA by mistake. If you have an HSA, your employer may offer a Limited Purpose FSA that only covers dental and vision. That won’t cover TMS. Check your FSA type before you count on it

How to Get TMS Approved

What If You’re Denied?

For more details, see our Prior Authorization Guide and Denied Coverage Appeals guide.