Can I Use My HSA to Pay for My Gym Membership?

A Health Savings Account (HSA) is a tax-advantaged savings and spending vehicle designed for healthcare expenses. It pairs with a high-deductible health plan (HDHP), allowing individuals to contribute pre-tax dollars to cover qualified medical costs. Funds within an HSA can grow tax-free, and withdrawals for eligible expenses are also tax-free, offering a triple tax advantage.

Understanding HSA Eligibility

The Internal Revenue Service (IRS) establishes specific guidelines for what constitutes a “qualified medical expense” that can be paid for with HSA funds. These expenses are broadly defined as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for treatments affecting any structure or function of the body. The expense must primarily alleviate or prevent a physical or mental disability or illness, rather than being merely beneficial for general health.

Common examples of eligible medical expenses include doctor visits, prescription medications, dental care, vision care, eye examinations, and eyeglasses. Hospital bills, laboratory fees, and services from chiropractors and physical therapists also qualify. Over-the-counter medications and menstrual care products are eligible without a prescription. Expenses for general health improvement, like vitamins or a vacation, are not considered qualified medical expenses unless prescribed for a specific medical condition. IRS Publication 502 provides a comprehensive list of eligible medical and dental expenses.

Gym Memberships and HSA

Gym memberships are not considered qualified medical expenses by the IRS and therefore cannot be paid for with HSA funds. These expenses are viewed as personal or recreational and contribute to general wellness, which falls outside the scope of eligible medical care. Using HSA funds for non-qualified expenses can result in the withdrawal being subject to federal income tax and a 20% penalty if the account holder is under age 65.

However, a gym membership might be eligible under specific circumstances. If a physician prescribes a gym membership as part of a treatment plan for a specific diagnosed medical condition, it may qualify. Conditions such as obesity, diabetes, hypertension, heart disease, or post-surgery rehabilitation are examples where exercise might be deemed medically necessary. The gym membership must be directly related to the treatment or alleviation of a specific disease, not just for general fitness.

To substantiate medical necessity, a “Letter of Medical Necessity” (LMN) from a licensed medical professional is required. This document must clearly state the specific medical condition that necessitates the gym membership. It should also explain how the gym membership directly treats or mitigates that condition and specify the duration for which the necessity is expected to last. The LMN demonstrates that the expense is for a targeted medical purpose, not merely for general health. The LMN should be dated on or before the start date of the gym membership to ensure compliance.

Documentation and Record Keeping

Maintaining thorough records for all HSA expenditures is important, particularly for expenses like gym memberships that require specific medical justification. The IRS holds the account holder responsible for proving the legitimacy of all expenses claimed. You must retain receipts for your personal records in case of an IRS audit.

These records should include receipts for gym membership payments, any Explanation of Benefits (EOBs) from your health plan if applicable, and the Letter of Medical Necessity. The LMN should clearly outline the medical condition, the prescribed activity, and the duration of the necessity. Keeping these documents organized and accessible is essential, as the IRS can request proof of eligibility for any HSA distribution. Without proper documentation, any expense deemed non-qualified during an audit could lead to taxes and penalties on the withdrawn amount.