Can You Buy Exercise Equipment With an HSA?

A Health Savings Account (HSA) is a tax-advantaged savings vehicle for healthcare expenses. Individuals enrolled in a high-deductible health plan (HDHP) are generally eligible to contribute. This account allows for pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses, offering a valuable tool for managing healthcare costs.

General Rules for HSA Qualified Medical Expenses

The Internal Revenue Service (IRS) defines a “qualified medical expense” as costs incurred primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. These expenses must be for medical care as outlined in IRS Publication 502. Commonly accepted qualified expenses include costs for doctor visits, hospital services, prescription medications, dental care, and vision care.

Expenses for general health improvement, wellness, or cosmetic purposes are not considered qualified medical expenses. For instance, items merely beneficial to general health, such as vitamins for everyday use or elective cosmetic surgeries, are not covered. To be eligible, the expense must be directly related to alleviating or preventing a physical or mental disability or illness.

Exercise Equipment and HSA Eligibility

Exercise equipment purchased solely for general health improvement, fitness, or weight loss, such as treadmills, weights, ellipticals, or stationary bikes, is not considered a qualified medical expense and cannot be paid for with HSA funds. The IRS views these as expenses for overall well-being rather than for a specific medical necessity.

However, an exception allows exercise equipment to be HSA-eligible if prescribed by a medical professional to treat a diagnosed medical condition or for physical therapy. For example, a physician might prescribe a treadmill for rehabilitation after an injury or to manage chronic conditions such as obesity, diabetes, hypertension, or cardiovascular disease. The equipment’s purpose must be therapeutic and directly linked to a specific medical diagnosis, not just general wellness.

Documentation and Requirements for Eligibility

If exercise equipment is purchased under the medical necessity exception, documentation is required. Account holders must obtain a “Letter of Medical Necessity” (LMN) or a similar prescription from a qualified healthcare provider. This document demonstrates medical necessity for a specific condition.

The LMN must clearly state the patient’s specific diagnosis, explain how the exercise equipment is necessary to alleviate or treat that condition, and specify the type of equipment recommended. The LMN should also indicate the expected duration, as LMNs are typically valid for one year and may require renewal. Maintain records, including the LMN, the purchase receipt, and medical documentation, for tax purposes and in the event of an IRS audit. Using HSA funds for non-qualified expenses can result in the amount being subject to income tax and a 20% penalty.