Are Saunas FSA Eligible With a Letter of Medical Necessity?

Flexible Spending Accounts (FSAs) serve as a common employee benefit, allowing individuals to set aside pre-tax money for eligible healthcare expenses. While many medical costs are clearly understood as qualifying, questions often arise concerning less conventional items, particularly those related to general wellness, such as saunas. Understanding the specific guidelines for these types of expenses is important for maximizing the benefits of an FSA.

Understanding FSA Eligibility

The Internal Revenue Service (IRS) outlines specific criteria for what qualifies as an FSA-eligible expense. An expense must be primarily for the purpose of alleviating or preventing a physical or mental disability or illness. This definition includes costs for the diagnosis, cure, mitigation, treatment, or prevention of disease. Expenses solely for general health improvement or cosmetic purposes typically do not qualify for reimbursement.

Commonly eligible expenses include doctor visits, prescription medications, dental care, vision care, and physical therapy. These guidelines ensure FSA funds are used for necessary medical care, not for general health or appearance benefits.

Sauna Eligibility Requirements

Saunas are generally not considered FSA eligible for routine use or general wellness. Using a sauna for relaxation or cosmetic benefits does not meet the IRS definition of medical care. However, a sauna can become an eligible expense if a qualified healthcare professional determines it is medically necessary to treat or alleviate a specific medical condition.

To establish medical necessity, a Letter of Medical Necessity (LMN) is typically required from a physician or other licensed healthcare provider. This written statement explains why the sauna is recommended for a particular health condition. The LMN must include specific details, such as the diagnosed medical condition, a clear description of the recommended treatment, including frequency or duration, and how the sauna will alleviate the patient’s specific symptoms. It should explicitly state that the treatment is for a medical purpose, not for general health or cosmetic improvement.

An LMN is usually valid for a specified period, often 12 months, and may require annual renewal. Conditions that might warrant an LMN for sauna use include chronic pain, certain skin conditions, specific circulatory issues, arthritis, or fibromyalgia, where heat therapy is a recognized part of a treatment plan. Even with an LMN, reimbursement is not guaranteed and remains subject to the FSA administrator’s review and approval.

Steps for FSA Reimbursement

After a sauna expense is incurred and eligibility requirements, including a valid Letter of Medical Necessity, are met, submit a claim for reimbursement. Gather necessary documentation, including a detailed, itemized receipt for the sauna purchase or service. The receipt must clearly show the date of service, the amount paid, a description of the item or service, and the name of the provider or merchant. Credit card statements or balance-forward invoices are typically not sufficient on their own.

With the LMN and detailed receipt in hand, the claim can be submitted to the FSA administrator. Most administrators offer several convenient methods for submission, including online portals, mobile applications, or traditional mail and fax options. After submission, the FSA administrator reviews the claim for compliance with IRS regulations and plan rules. Processing times vary, but many claims are processed within a few business days. Reimbursements are commonly issued via direct deposit or mailed check. It is advisable to submit claims promptly throughout the plan year and to be aware of any specific deadlines set by the FSA plan to avoid forfeiture of unused funds.