Can I Buy Protein Powder With HSA?
Learn if protein powder is an eligible HSA expense. Navigate IRS guidelines, medical necessity, and required documentation for tax-advantaged healthcare spending.
Health Savings Accounts (HSAs) provide a tax-advantaged way for individuals with high-deductible health plans (HDHPs) to save and pay for eligible healthcare expenses. Contributions are pre-tax, and withdrawals for qualified expenses are tax-free. A common question concerns the eligibility of non-traditional items, such as protein powder, for HSA reimbursement.
General Eligibility for Health Savings Accounts
HSAs are tax-advantaged medical savings accounts for taxpayers enrolled in a high-deductible health plan. Contributions are not subject to federal income tax, and funds roll over year to year. HSA funds can be used for qualified medical expenses without federal tax liability or penalty. The Internal Revenue Service (IRS) defines qualified medical expenses as costs primarily incurred to alleviate or prevent a physical or mental disability or illness.
Eligible expenses include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any body structure or function. Common examples are doctor visits, prescription medications, dental care, and vision care. Expenses merely beneficial to general health, like vitamins or general supplements, are typically not covered. Dietary substitutes or general nutritional requirements are not qualified medical expenses unless specific conditions are met.
Protein Powder as a Medical Expense
Protein powder, like other dietary supplements, is generally not eligible for HSA reimbursement because it is commonly used for general health, athletic performance, or muscle building. The IRS considers such items as promoting overall well-being rather than treating a specific medical condition. However, protein powder can be considered an eligible medical expense in rare cases if it is prescribed by a licensed medical practitioner for the treatment of a specific medical condition or illness. This requires establishing “medical necessity,” meaning the protein powder is essential for treating a diagnosed disease or medical condition.
Examples of scenarios where protein powder might qualify include its use for malnutrition, recovery from surgery requiring increased protein intake, or for certain chronic conditions that necessitate a high protein diet. The primary purpose must be to alleviate or treat an illness, not to satisfy normal nutritional needs or for general fitness goals. A physician’s prescription or a Letter of Medical Necessity (LMN) from a qualified healthcare provider is typically required to substantiate this medical necessity. The LMN should explicitly state the diagnosed medical condition and explain why the protein powder is a necessary component of the treatment plan.
Documentation and Compliance
Account holders who use HSA funds for protein powder must maintain thorough documentation to substantiate the expense in case of an IRS audit. This documentation should include the prescription or Letter of Medical Necessity (LMN) from the healthcare provider, detailing the specific medical condition and the necessity of the protein powder for treatment. It is also important to keep all purchase receipts, as these records confirm the amount spent and the date of the transaction. These records must demonstrate that the distribution was exclusively for a qualified medical expense.
The IRS can audit tax returns for at least three years, so it is prudent to retain HSA records for an extended period. Using HSA funds for non-qualified expenses can lead to penalties. If funds are withdrawn for non-medical purposes, the amount is included in gross income and may be subject to income tax, plus an additional 20% penalty if the account holder is under age 65.