Can You Buy a Hot Tub With an HSA?

Health Savings Accounts (HSAs) offer a tax-advantaged way for individuals to save and pay for qualified medical expenses. These accounts are designed to help people manage healthcare costs, particularly those enrolled in high-deductible health plans. While HSAs are widely recognized for covering traditional medical services and prescription medications, questions often arise regarding their use for less conventional health-related items, such as a hot tub.

Understanding HSA Eligible Expenses

The Internal Revenue Service (IRS) provides guidelines for what constitutes an “eligible medical expense” for HSA purposes. Generally, these expenses include costs for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any structure or function of the body. These expenditures must be primarily for medical care and not merely for general health improvement or personal enjoyment.

IRS Publication 502, “Medical and Dental Expenses,” serves as the primary reference for eligible expenses. Examples of eligible expenses typically include doctor visits, hospital services, prescription medications, and certain over-the-counter drugs.

Specific Requirements for Hot Tub Eligibility

For a hot tub to be considered an eligible medical expense for HSA reimbursement, its primary purpose must be for medical care rather than general health or recreation. The IRS requires that the hot tub specifically alleviate or treat a diagnosed medical condition.

A Letter of Medical Necessity (LMN) from a licensed healthcare provider is a foundational requirement. This letter must detail the specific medical condition the hot tub is intended to treat, such as chronic pain or arthritis, and explain how it will alleviate symptoms. This documentation is crucial for establishing the medical necessity of the expense.

Only the portion of the cost directly attributable to medical care may be eligible, not any part used for general health or personal enjoyment. If the hot tub is considered a permanent improvement to a home, its cost may be eligible only to the extent that it exceeds any increase in the home’s value. Ongoing costs for operation and maintenance, like electricity and chemicals, can be deductible if the medical reason persists.

Maintaining Records and Reimbursement Process

Maintaining meticulous records is essential when seeking reimbursement from an HSA for a hot tub. Individuals must retain all documentation, including the Letter of Medical Necessity, detailed receipts for the hot tub purchase, and records for any associated installation or ongoing maintenance costs. These documents verify the expense’s eligibility.

The reimbursement process typically involves submitting these documents to the HSA administrator. Many HSA providers offer online portals for submitting claims, though paper forms are also an option. It is the account holder’s responsibility to ensure the expense meets IRS rules before requesting reimbursement.

Keeping these records is also necessary for tax purposes, particularly in the event of an IRS audit. The IRS may request proof that distributions from an HSA were used exclusively for qualified medical expenses and were not reimbursed from another source or taken as an itemized deduction. Records should be kept for at least three years, or as long as the HSA is open, whichever period is longer.