Can HSA Pay for Exercise Equipment?

A Health Savings Account (HSA) serves as a tax-advantaged savings and spending vehicle designed to assist individuals in managing qualified medical expenses. This type of account is typically paired with a high-deductible health plan (HDHP), allowing individuals to save pre-tax money for healthcare costs, grow funds tax-free, and make tax-free withdrawals for eligible expenses. The primary purpose of an HSA is to provide a personal fund for health needs.

General Rules for HSA Spending

Qualified medical expenses, as defined by Internal Revenue Service (IRS) guidelines, are those incurred primarily for the prevention or alleviation of a physical or mental defect or illness. These expenses must directly relate to medical care, rather than being merely beneficial for general health or well-being. Common examples of qualified expenses include payments for doctor visits, hospital stays, prescription medications, dental care, and vision services.

Expenses for general health improvement, such as vitamins for overall wellness or participation in a general fitness program, typically do not qualify for HSA reimbursement. The focus remains on medical necessity rather than broader health benefits.

When Exercise Equipment Qualifies

Exercise equipment generally does not qualify as a medical expense because it is typically purchased for general health and fitness purposes. However, such equipment can qualify if it is prescribed by a physician to treat a diagnosed medical condition. This exception requires the expense to be considered medically necessary. The equipment must be primarily for medical care, not for personal use beyond the medical purpose.

To meet this exception, you must obtain a Letter of Medical Necessity (LMN) from a licensed healthcare provider, such as a doctor or physical therapist. This LMN must explicitly state a specific medical diagnosis that necessitates the exercise equipment. For instance, conditions like severe obesity, cardiovascular disease, diabetes, or certain chronic pain issues may warrant such a prescription. The letter needs to detail how the specific piece of equipment will alleviate or treat the diagnosed condition, rather than simply improving general health.

The LMN should specify the type of equipment prescribed, such as a treadmill for cardiac rehabilitation or a stationary bike for knee therapy, and explain its direct role in the treatment plan. The LMN must clearly link the equipment to the clinical need arising from the diagnosis. If the treatment plan extends beyond the current year, a renewed LMN may be required annually to maintain eligibility. Without this detailed and specific documentation, exercise equipment purchases will not be considered eligible for HSA funds.

Maintaining Records and Reimbursement

Maintaining records is important when using your HSA, especially for expenses like exercise equipment that require specific medical substantiation. You must keep all relevant documentation, including the doctor’s prescription or Letter of Medical Necessity (LMN), detailed receipts for the exercise equipment, and any other supporting medical records. These records are essential because you, as the HSA account holder, are responsible for substantiating the eligibility of the expense if audited by the IRS.

While your HSA administrator may not require submission of these documents for reimbursement, you must retain them for potential IRS review. The IRS typically has a three-year period to audit tax returns, but it can extend to seven years in certain circumstances, so keeping records for at least that long is advisable. If you cannot provide proper documentation for a non-qualified withdrawal, the IRS may impose a 20% penalty on the amount, in addition to requiring you to pay income tax on the distribution.

You can initiate reimbursement from your HSA by submitting a claim to your HSA administrator, providing copies of your LMN and receipt, or by using an HSA debit card for direct purchase. Many HSA providers offer digital tools for uploading and storing receipts, which can simplify record-keeping. There is no time limit for requesting reimbursement for a qualified medical expense, as long as the expense was incurred after your HSA was established.