Are Saunas a Qualified Medical Expense for Your HSA?
Navigate HSA eligibility for saunas. Learn the specific IRS requirements and medical necessity rules to qualify your health expense.
Individuals enrolled in a high-deductible health plan (HDHP) can contribute pre-tax dollars to a Health Savings Account (HSA). Funds grow tax-free, and withdrawals for qualified medical expenses are also tax-free. Many account holders ask about the eligibility of health-related purchases, such as saunas. This article clarifies when a sauna might be an eligible HSA expense.
Understanding Qualified Medical Expenses
The Internal Revenue Service (IRS) defines a “qualified medical expense” for HSA purposes. These are costs primarily incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. This definition covers various medical services, equipment, and supplies. However, expenses for general health, wellness, or cosmetic purposes typically do not qualify. An eligible expense must not be reimbursed by another health plan or insurance.
The IRS states that an expense must be medically necessary. If HSA funds are used for non-qualified expenses, the amount becomes taxable and may incur an additional 20% penalty, unless the account holder is age 65 or older.
Conditions for Sauna HSA Eligibility
Saunas are not HSA-eligible for general wellness or relaxation alone. A sauna purchase can be a qualified medical expense only under specific circumstances. The sauna must be medically necessary for the treatment or prevention of a specific diagnosed medical condition or to alleviate a particular medical ailment. This necessity must be formally recognized by a licensed medical professional.
To qualify, a doctor or other qualified healthcare provider must issue a Letter of Medical Necessity (LMN). This letter serves as documented proof that the sauna is essential for managing or preventing a specific health issue, such as chronic pain, certain circulatory problems, or particular skin conditions. The LMN must clearly connect the sauna’s use to the diagnosed condition. For example, if heat therapy from a sauna is part of a prescribed treatment plan for muscle tension or improved circulation, it may qualify. A general gym membership offering sauna access, or a sauna used solely for personal enjoyment without a medical directive, will not meet the eligibility criteria.
Documentation and Reimbursement Process
If a sauna meets eligibility requirements, obtaining and maintaining proper documentation is essential for HSA reimbursement. The crucial document is the Letter of Medical Necessity (LMN) from a licensed medical professional. This letter should specify the exact diagnosis, explain the medical purpose, and ideally recommend the duration or frequency of its use. It is advisable to secure the LMN dated on or before the sauna purchase date.
Keep meticulous records of all associated costs, including the LMN and all purchase or rental receipts. These records are vital for tax purposes in case of an IRS audit, as insufficient documentation can lead to taxes and penalties. Submitting for reimbursement typically involves providing these documents to the HSA administrator. Some HSA providers allow direct payment with an HSA debit card; others require out-of-pocket payment followed by a reimbursement request. There is no time limit to request HSA reimbursements for past qualified medical expenses, provided the HSA account was open when the expense was incurred and not reimbursed from other sources.