Can I Use My HSA on Massage Therapy?
Navigating HSA use for massage therapy? Understand the specific conditions and essential documentation needed for eligibility.
A Health Savings Account (HSA) offers a tax-advantaged way to save and pay for qualified medical expenses. Available to individuals with a high-deductible health plan (HDHP), contributions are pre-tax, funds grow tax-free, and withdrawals for eligible expenses are also tax-free. While HSAs cover many healthcare costs, using them for massage therapy requires meeting specific tax regulations.
Understanding Medical Necessity for Massage
To be an HSA-eligible expense, massage therapy must meet the definition of medical care. This means it is for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any part or function of the body. This is distinct from general wellness, relaxation, or stress relief, which do not qualify. The Internal Revenue Service (IRS) outlines these guidelines in Publication 502.
Massage therapy may qualify if prescribed by a licensed physician to treat a specific medical condition. Examples of conditions for which massage might be considered medically necessary include chronic pain, injuries requiring rehabilitation, or specific illnesses like fibromyalgia or migraines. The massage must be part of a treatment plan for an existing physical or mental illness, not for general health improvement.
A physician’s prescription establishes the medical purpose, transforming what would typically be a general wellness expense into a qualified medical expense. Without this documented medical necessity, using HSA funds for massage therapy could lead to the expense being deemed ineligible by the IRS.
Obtaining a Letter of Medical Necessity
A Letter of Medical Necessity (LMN) is a document for proving HSA eligibility for massage therapy. This letter formally substantiates that the massage is a necessary medical treatment rather than a general wellness activity. It is important evidence should the IRS ever audit your HSA expenditures.
A licensed physician, not the massage therapist, must issue the LMN. The letter needs to contain specific details to be considered valid for HSA purposes. These details include the patient’s specific diagnosis, a clear explanation of how massage therapy directly treats that condition, and the recommended frequency and duration of the treatment.
The LMN should explicitly state that the massage therapy is not for general wellness or relaxation, but rather for a defined medical purpose. This document typically remains valid for up to 12 months, and a new letter may be required if treatment extends beyond this timeframe.
Using Your HSA and Maintaining Records
Once you have obtained a valid Letter of Medical Necessity, you can use your HSA funds for massage therapy. You can either use an HSA debit card directly at the time of service if the provider accepts it, or pay out-of-pocket and then reimburse yourself from your HSA. This allows you to pay for expenses now and reimburse yourself later, even years down the line, provided the expense was incurred after your HSA was established.
Record-keeping is important for all HSA transactions, particularly for expenses requiring an LMN. Retain the original Letter of Medical Necessity, detailed receipts from the massage therapist that include the date of service, description of the expense, and amount paid, and any Explanation of Benefits (EOB) statements from your health insurance provider. These records are important for substantiating expense eligibility during an IRS audit.
As the HSA account holder, you are responsible for proving distributions were used for qualified medical expenses. Failure to provide adequate documentation could result in the distribution being considered taxable income and subject to a 20% penalty. Consult your HSA administrator or employer for any additional plan-specific requirements or procedures.