Can You Use an HSA for a Gym Membership?

A Health Savings Account (HSA) is a tax-advantaged savings and spending account designed to help individuals manage qualified medical expenses. Funds can be contributed, grow, and be withdrawn tax-free when used for eligible healthcare costs. This account offers a “triple-tax advantage”: contributions are tax-deductible, investment earnings grow tax-free, and withdrawals for qualified medical expenses are also tax-free. HSAs are available to those enrolled in a high-deductible health plan (HDHP), which typically features lower monthly premiums but higher out-of-pocket costs before insurance coverage begins.

Qualifying a Gym Membership as a Medical Expense

Gym memberships are not automatically considered a qualified medical expense by the IRS. The IRS defines a “qualified medical expense” as costs for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. Expenses beneficial only to general health, like a typical gym membership, do not meet this definition unless specific conditions are met.

For a gym membership to be a qualified medical expense, it must be medically necessary to treat or prevent a specific diagnosed condition. A healthcare provider must recommend exercise as an integral part of a treatment plan. For example, a gym membership might qualify if prescribed for conditions such as obesity, heart disease, diabetes, hypertension, chronic pain, or as part of post-surgery rehabilitation.

The crucial document to establish medical necessity is a Letter of Medical Necessity (LMN), also known as a doctor’s note or prescription. This letter must clearly state a specific medical diagnosis that necessitates the gym membership. It should also explain how the gym membership is essential for treating or preventing that diagnosed condition, outlining the specific duration or type of activity prescribed.

The LMN should be dated on or before the gym membership’s start date to ensure compliance. The core requirement remains a direct link between a diagnosed medical condition and the prescribed use of a gym for treatment. Most LMNs are valid for about 12 months; a new letter may be needed annually if the condition persists.

Required Documentation and Record Keeping

Once a gym membership is a qualified medical expense due to medical necessity, maintaining documentation is crucial for IRS compliance. You are responsible for proving the eligibility of any expense paid with HSA funds. This includes retaining the original Letter of Medical Necessity from your healthcare provider.

Beyond the LMN, keep detailed receipts from the gym showing payments made. These receipts should include the amount paid, the payee’s name, and the transaction date. Also keep any other supporting documentation, such as an Explanation of Benefits (EOB) from your health insurer or notes linking the expense to your medical condition.

Maintain these records for as long as your tax return is subject to audit, typically at least three years, or as long as your HSA is open, whichever is longer. Organized record-keeping simplifies demonstrating that withdrawals were for qualified medical expenses if your account is audited. Without proper documentation, funds used for non-qualified expenses may be subject to income tax and a 20% penalty if withdrawn before age 65.

Accessing Your HSA Funds

After establishing your gym membership as a qualified medical expense and gathering documentation, you have options for accessing HSA funds. One method is using an HSA-specific debit card provided by your account administrator directly at the gym for immediate payment.

Alternatively, pay for the membership out-of-pocket and then reimburse yourself from your HSA. This process typically involves submitting a claim to your HSA administrator, often through their online portal or mobile application. You will provide expense details, including amount and date, and may upload receipts. Many HSA providers allow electronic transfers to a linked personal bank account or offer checks.

There is no time limit for reimbursing yourself for qualified medical expenses, provided the expense was incurred after your HSA was established. This allows HSA funds to grow tax-free over time, enabling reimbursement much later. Always ensure the expense is qualified and retain all supporting documentation for tax purposes.