Can You Use HSA to Buy Exercise Equipment?

A Health Savings Account (HSA) serves as a tax-advantaged savings tool designed to help individuals cover qualified medical expenses. These accounts are typically available to those enrolled in a high-deductible health plan (HDHP), allowing contributions to grow tax-free and withdrawals for eligible expenses to be tax-free as well.

Understanding HSA Eligible Expenses

The Internal Revenue Service (IRS) defines what constitutes a “qualified medical expense” for HSA purposes. These expenses must primarily be for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any part or function of the body. Costs for equipment, supplies, and diagnostic devices needed for these purposes are generally included.

Common examples of eligible expenses include doctor visits, prescription medications, dental care, vision care, diagnostic tests, acupuncture, and chiropractic services. However, expenses considered merely beneficial to general health, such as vitamins or items for overall well-being, are typically not covered.

Qualifying Exercise Equipment as a Medical Expense

Exercise equipment is generally not considered an eligible HSA expense when purchased for general health, fitness, or weight loss. Therefore, for exercise equipment to qualify, there must be a clear medical necessity.

This means the equipment must be prescribed by a physician specifically to treat a diagnosed medical condition, disease, or injury. A crucial requirement is obtaining a Letter of Medical Necessity (LMN) from a healthcare provider. This letter must detail the diagnosed medical condition, specify the recommended equipment, and explain how it will treat or alleviate the condition. For instance, a treadmill might qualify if prescribed for cardiac rehabilitation, or specialized resistance bands for physical therapy related to a chronic condition. Conditions such as obesity, diabetes, high blood pressure, and cardiovascular disease are examples where exercise equipment might be deemed medically necessary with proper documentation.

Purchasing and Record Keeping

After establishing that exercise equipment qualifies as a medical expense with an LMN, individuals can use their HSA funds for the purchase. One common method is using an HSA-linked debit card for direct payment at the time of purchase. Alternatively, individuals can pay out-of-pocket and then reimburse themselves from their HSA, which offers flexibility as there is no deadline for reimbursement, provided the expense was incurred after the HSA was established.

Meticulous record-keeping is essential for all HSA transactions, particularly for expenses like exercise equipment that require medical necessity. Individuals should retain the Letter of Medical Necessity, the purchase receipt for the equipment, and any supporting medical records related to the diagnosis and prescription. These documents are vital in case of an IRS audit, as insufficient documentation for non-qualified expenses can lead to the amount being taxed and a potential 20% penalty if the account holder is under age 65. Records should generally be kept for at least three years, or longer if the HSA is kept open for future reimbursements.