Can You Pay for a Gym Membership With an HSA?

Health Savings Accounts (HSAs) offer a tax-advantaged way to save and pay for qualified medical expenses. These accounts are designed to help individuals with high-deductible health plans manage healthcare costs. Contributions to an HSA are tax-deductible, the funds grow tax-free, and withdrawals for eligible medical expenses are also tax-free. This allows account holders to build savings for current or future healthcare needs, including those in retirement.

Understanding Eligibility for Health Savings Accounts

An expense is eligible for HSA reimbursement if it is for medical care, as defined by Internal Revenue Service (IRS) Publication 502. This publication specifies that qualified medical expenses are costs for the “diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body.” General health improvements or exercise for overall well-being do not qualify. A standard gym membership, intended solely for general fitness, is not considered a qualified medical expense under IRS guidelines.

However, a gym membership can qualify for HSA coverage if prescribed by a medical professional as part of a treatment plan for a specific, diagnosed medical condition. This could include conditions such as obesity, heart disease, diabetes, hypertension, or for injury rehabilitation. To substantiate this medical necessity, a Letter of Medical Necessity (LMN) from a healthcare provider is required.

Obtaining a Letter of Medical Necessity

A Letter of Medical Necessity (LMN) is a formal document from a licensed healthcare provider explaining why a specific service, like a gym membership, is medically necessary. This letter is required for expenses not automatically considered medical, and it serves as documentation for IRS purposes.

The LMN must clearly connect the gym membership to the treatment or prevention of a specific medical condition. It should include the patient’s name, their medical diagnosis, and a detailed explanation of how the gym membership will directly address or alleviate that condition. The letter should also specify the duration for which the gym membership is necessary, often valid for up to 12 months. A licensed medical professional, such as a primary care physician, nurse practitioner, or physical therapist, must sign and date the letter, including their credentials.

Submitting for Reimbursement

Once a gym membership is eligible with a valid Letter of Medical Necessity, there are two ways to use HSA funds. Account holders can use an HSA debit card directly if the gym accepts it. Alternatively, they can pay for the membership out-of-pocket and then reimburse themselves from their HSA. This self-reimbursement can occur at any time after the expense is incurred, even years later, as long as it was incurred after the HSA was established.

Regardless of the payment method, account holders must maintain thorough records. This documentation should include receipts for all payments, the Letter of Medical Necessity, and any other relevant medical documentation, such as an Explanation of Benefits (EOB) from the health insurance carrier. While HSA custodians may not require these documents for every transaction, the primary responsibility for proving the eligibility of expenses for tax purposes rests with the account holder. These records should be kept for at least seven years to avoid potential penalties and taxes on unqualified distributions during an IRS audit.