8 Proven Ways Families Can Get Funding to Attend Your Therapeutic or Residential Program
Updated: Apr 9, 2020
Every family has a different set of circumstances, needs and financial wherewithal when it comes to seeking therapy options for their son or daughter. One thing is universal, it is hard enough to seek help with treatment, yet alone the financial aspects to cover proper therapy.
We here at TherapyScout never want to hear that financial hardship is a barrier for a family that desperately needs the services your program provides. The good thing is that there are indeed options if you know where to go.
Our dear friend Tamara Bolthouse of The Envoy Group works with families day in and day out. Her mission is to align families in need with the right programs.
One of the questions she is repeatedly asked is specific to funding and resources that are available to families.
She sent us a great list of resources, tools and websites that are perfect for helping those who need a little extra financial assistance specific to costs associated with therapy. As a disclaimer TherapyScout has no affiliation with the below listed and no financial incentive to recommend any of the options listed.
As we begin there are three areas or options that are available to the families you serve.
1. Medical Care Deduction: Publication 502
As a tax paying citizen you do have rights and deductions that can be used to ease the financial pressures of a therapeutic program. We are not tax experts, and as with any recommendation please seek the consultation of an expert.
Publication 502 explains the itemized deduction for medical and dental expenses that you claim on Schedule A (Form 1040), including:
What expenses, and whose expenses, you can and cannot include in figuring the deduction.
How to treat reimbursements and how to figure the deduction.
How to report the deduction on your tax return and what to do if you sell medical property or receive damages for a personal injury.
The Internal Revenue Code allows a deduction for medical care of the taxpayer, the taxpayer's spouse, or dependents to the extent that those expenses exceed 10% of the taxpayer's adjusted gross income*.
Deductions will be dependent on why your child was placed in a therapeutic boarding school. Alcohol and Substance Abuse placements are tax deductible, as well as some placements for learning disabilities (For the costs to be deductible, overcoming the disability must be the principal reason for attending the school).
You can learn more by visiting: https://www.irs.gov/publications/p502/ar02.html
2. Medical Insurance:
If you have health insurance, you may qualify for financial assistance. Federal Mental Health Parity Law states that health plans (which offer mental health benefits) MUST offer them in parity with medical/surgical benefits. Many programs work with insurance companies already.
If you need help understanding or navigating how to leverage insurance carriers for your program, please don’t hesitate to call, email or message us here at TherapyScout. We would be honored to get you in contact with someone that can help get your families the coverage they are entitled to.
3. 3rd Party Lenders:
The use of third-party patient financing programs continues to be a popular option to cover out-of-pocket costs and treatment not covered by insurance. When out-of-pocket costs for treatment are high, families may delay or decline the care their son or daughter desperately needs. It can be a financial strain for many people to write an unexpected check from their monthly budget in today’s economic landscape.
These types of lenders can work with families to craft individualized payment plans that fit the needs necessary to enroll their son or daughter into treatment.
Below are a list of lenders that have supported families The Envoy Group has worked with in the past.
Lightstream / SunTrust Bank
About: LightStream delivers a revolutionary loan experience that allows customers to focus on their purchase, rather than on their financing. With our innovative lending products and proprietary technology, consumers with strong credit profiles can receive highly competitive, fixed rate financing via an easy, fast and virtually paperless loan process. From the convenience and comfort of their computer or mobile device, customers can apply, be approved, sign their loan agreement and receive their funds, as soon as the same day of their application.
Highlights: Rates quoted with AutoPay option. Invoicing option is 0.50 points higher. Invoices are delivered by email. Fixed rate, simple interest fully amortizing installment loans, no fees or prepayment penalties. Loan proceeds may not be used to refinance any existing loan with LightStream. Florida loans subject to Documentary Stamp Tax.
Direct Link: https://www.lightstream.com/med-loans
About: Prosper was founded in 2005 as the first peer-to-peer lending marketplace in the United States. Since then, Prosper has facilitated more than $17 billion in loans to more than 1,000,000 people.
Through Prosper, people can invest in each other in a way that is financially and socially rewarding. Borrowers apply online for a fixed-rate, fixed-term loan between $2,000 and $40,000. Individuals and institutions can invest in the loans and earn attractive returns. Prosper handles all loan servicing on behalf of the matched borrowers and investors.
Highlights: Lending up to $35,000 for Health/Medical/Treatment at customized lending rates based on credit history, credit worthiness, and amount requested. Programs must sign up as a Prosper Affiliated program to accept applications for funding to their program through Prosper.
Direct Link: www.prosper.com
About: For over 20 years, M~lend Financial has offered patient and consumer financing services throughout the country. We’re unique for the industry in that we charge no fees or have discounted payments to the providers. Doctors, clinics, hospitals, treatment facilities, insulation and home improvement companies can participate without sign up or agreement. There is no paperwork or loan contracts to complete and keep on file.
Lending includes 0% APR on our credit cards options (at no additional cost) and low fixed interest installment loans (no 0% APR offered) for various credit ratings up to 84 month terms and $100,000.
Highlights: Options include interest free credit cards (at no additional costs) and low interest installment loans for various credit ratings up to 84 month terms and $100,000.
Particularly for addiction treatment. With no interest charges for an extended period of time, this can be a welcome bridge to financing.
Direct Link: www.mlendfinance.com
Medical Financing-Cross River Bank
About: Cross River is the trusted financial services organization that merges the established expertise of a bank, with the innovation and product offering of a technology company. We are experienced leaders working to protect our clients’ business goals, providing streamlined, end-to-end solutions, so they can grow in the ever-evolving market.
Highlights: Loan amounts range from $1,000 to $35,000. No loans are offered in Connecticut, New York, West Virginia and Vermont. An origination fee of 8% is included in the principal loan amount. The Annual Percentage Rate (APR) is the cost of credit as a yearly rate. The APR offered to you will depend on such factors as your credit score, application information, loan amount, loan term, and credit history.
Direct Link: http://medicalfinancing.com/patients/application.asp
Adoptive Families Coalition - Non Profit Assistance with Fundraising or Scholarship
About: The Adoptive Families Coalition (AFC) offers resource to families with post adoption challenges. In addition to financial assistance through their sponsorship program, AFC provides parent coaches, resource networking database, and support for families struggling to help their child heal from attachment and trauma.
Highlights: Adoptive Families Coalition offers a unique plan to assist in meeting the high cost of therapeutic treatment. Call 602-740-7149 or 602-390-0220.
Adoptive Families Coalition (AFC) welcomes and helps families with post adoption challenges. You can find an application on the Sponsorship page.
Direct Link: http://adoptive.org/sponsorship
5 BONUS OPTIONS!
About: An IEP is defined as a written plan defining the program that is designed to meet the unique needs of one child. The Individuals with Disabilities Education Act (IDEA) requires public school districts to develop an individualized plan for every child who qualifies as having one of the identified thirteen disabilities identified by IDEA as a qualifying condition for special education.
Crime Victim's Compensation
About: State Crime Victims Compensation programs reimburse victims for crime-related expenses. Such expenses include medical costs, mental health counseling, funeral and burial costs and lost wages or loss of support. All states, the District of Columbia, the U.S. Virgin Islands, Guam, and Puerto Rico have established compensation programs for crime victims. Although each state compensation program is administered independently, most programs have similar eligibility requirements and offer comparable benefits.
Compensation is paid only when other financial resources, such as private insurance and offender restitution, do not cover the loss. Some expenses are not covered by most compensation programs, including theft, damage, and property loss. State compensation programs are not required to compensate victims in terrorism cases.
All U.S. states and territories can apply. To receive compensation, victims must comply with state statutes and rules. This requires victims to cooperate with reasonable requests of law enforcement and submit a timely application to the compensation program.
To identify requirements, the Office for Victims of Crime (OVC) website provides links to Victim Assistance and Compensation Programs and corresponding state administrator contact information.
Direct Link: https://www.benefits.gov/benefit/4416
Educational or College Savings Plans:
About: A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.
There are two types of 529 plans: prepaid tuition plans and education savings plans. All fifty states and the District of Columbia sponsor at least one type of 529 plan. In addition, a group of private colleges and universities sponsor a prepaid tuition plan.
Parents can withdraw money from a 529 plan at any time for any reason. However, the earnings portion of a non-qualified distribution will incur income tax and a 10% penalty. To enjoy the full tax benefits of a 529 plan, funds must be used to pay for qualified higher education expenses.
Money invested in a 529 plan grows tax-deferred, and qualified distributions are tax-free. Families may also be eligible for a state income tax deduction or credit for 529 plan contributions, depending on where they live.
Qualified 529 plan expenses include costs required for the enrollment or attendance at a college, university or other eligible post-secondary educational institution.
Adoption Assistance Funding for State Adopted Children
About: The adoption assistance database was launched in 2005, based on information provided by the Association of Administrators of the Interstate Compact on Adoption and Medical Assistance (AAICAMA), and is updated on a periodic basis. In 2018-2019, its content underwent an in depth review and revision to reflect specific changes in State policies.
Select one of two options:
A) Select a State to view the answers to 13 questions regarding State policies on adoption assistance and post adoption services, or
B) Select a question to find out how it is addressed across all States.
North American Council on Adoptable Children (NACAC)
About: Founded by adoptive parents in 1974, the North American Council on Adoptable Children (NACAC) works to ensure all children in foster care have permanent, loving families and adoptive families have the support they need.
Our vision: Every child has a permanent, loving, and supported family.
Our mission: NACAC supports, educates, inspires, and advocates so adoptive families thrive and every child in foster care has a permanent, safe, loving family.
Each state operates its own program to support children who were adopted from that state. In general, the rules and benefits of adoption assistance (also known as adoption subsidy) are based on where the child is adopted from, rather than where the family lives.
Click on the link below to learn more about each state’s adoption assistance program, including which children and families are eligible, what benefits are provided, how the program is funded, and more.
You can also review a chart that compares the major aspects of all states’ adoption assistance programs.
Single Case Agreements with Insurers or Retirement Fund:
Some retirement plans allow you to borrow against a retirement fund to pay for medical purposes without a penalty for early withdrawal. There are various ways you can do this.
If you need a significant sum of money and don't expect to have the means to repay it, one option that may be available is a hardship withdrawal from the 401(k) at your current employer. Without the hardship provision, withdrawals are difficult at best if you're younger than 59½. A hardship withdrawal, though, allows funds to be withdrawn from your account to meet an “immediate and heavy financial need,” such as covering medical or burial expenses or avoiding foreclosure on a home.
A hardship withdrawal is an emergency removal of funds from a retirement plan, sought in response to what the IRS terms "an immediate and heavy financial need." Such special distributions may be allowed without penalty from such plans as a traditional IRA or a 401k, provided the withdrawal meets certain criteria for why the funds are needed and their amount. However, even if penalties are waived (notably the 10% penalty for withdrawals made before age 59½), the withdrawal will still be subject to standard income tax.
As with any major financial decision please consult a professional before making a decision.
We hope that you found the above information useful! If you come across or use other methods today, please comment or message us directly. We would love to continue adding to this resource list as new options become available.
A huge thank you again to Tamara Bolthouse of The Envoy Group!
The Envoy Group: We utilize over a decade of knowledge and experience to educate and assist families in their search for the best Therapeutic Boarding School, Residential Treatment Center, or Wilderness Therapy options for their struggling or at-risk teen. Learn more by visiting https://www.theenvoygroup.com
TherapyScout: We help programs and practices reach the top of search results while proactively gaining positive reviews that turn into higher student placements. See more at www.therapyscoutteam.com