Can You Use an HSA for a Gym Membership?
Navigate HSA rules for gym memberships. Learn when fitness expenses qualify as medical necessities and how to document them for reimbursement.
Health Savings Accounts (HSAs) provide a tax-advantaged way for individuals with high-deductible health plans to save and pay for qualified medical expenses. A common question concerns the eligibility of gym memberships. Understanding specific Internal Revenue Service (IRS) guidelines is important for proper use of HSA funds.
Defining Qualified Medical Expenses
The IRS defines a “qualified medical expense” as costs primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for treatments affecting any part or function of the body. These expenses must be incurred to alleviate a physical or mental defect or illness. Expenses that are merely beneficial to general health, such as vitamins or a vacation, are not considered qualified medical expenses.
General fitness expenses, like typical gym memberships, which are primarily for overall health improvement, do not usually meet this strict IRS definition. These are often classified as personal expenses for general health and fitness. Using HSA funds for such non-qualified expenses can result in taxes and a potential 20% penalty if the account holder is under age 65.
When Gym Memberships Qualify
A gym membership may qualify as an HSA-eligible expense under specific, limited circumstances, primarily when it is medically necessary. A physician must prescribe the gym membership as part of a treatment plan for a specific diagnosed medical condition or illness. Conditions that might warrant such a prescription include obesity, diabetes, hypertension, heart disease, or physical therapy for an injury. The membership must be purchased for the sole purpose of affecting a structure or function of the body or treating a specific disease.
To substantiate this medical necessity, a Letter of Medical Necessity (LOMN) from a healthcare professional is generally required. This letter should clearly state the patient’s diagnosis and explain why the gym membership or specific exercise regimen is medically necessary for treating or managing that condition. The IRS emphasizes that the expense must be primarily for the prevention or alleviation of a physical or mental illness, and not merely for general health improvement.
Documenting and Reimbursing Expenses
Once a gym membership is deemed a qualified medical expense due to medical necessity, proper documentation is essential. You must retain a doctor’s prescription or the Letter of Medical Necessity (LOMN), along with detailed receipts from the gym. The LOMN should include the patient’s name, a specific diagnosis, the recommended treatment plan, the duration of the treatment, and the physician’s signature and date. These records are crucial in case of an IRS audit, as the account holder is responsible for proving the eligibility of all HSA withdrawals.
You can use an HSA-linked debit card for direct payment or pay out-of-pocket and then reimburse yourself from your HSA. You can reimburse yourself at any time, even years later, provided the expense was incurred after your HSA was established. It is recommended to keep all HSA-related records, including receipts and statements, for at least three years, which is the general IRS audit period.