Does an HSA Cover Massages for Medical Reasons?
Navigate HSA coverage for medical treatments like therapeutic massage. Understand the crucial IRS requirements and documentation needed for eligibility.
Health Savings Accounts (HSAs) offer a way to save and pay for healthcare costs with tax advantages. These accounts help individuals covered by high-deductible health plans manage current medical expenses and build savings for future healthcare needs. Funds contributed to an HSA grow tax-free, and withdrawals remain tax-free when used for qualified medical expenses. This makes HSAs a financial tool for healthcare planning.
Understanding HSA-Eligible Expenses
For an expense to qualify for HSA reimbursement, it must meet the Internal Revenue Service (IRS) definition of a “qualified medical expense.” According to IRS Publication 502, these are costs incurred primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease. They also include expenses for the purpose of affecting any structure or function of the body.
Common examples of qualified medical expenses include doctor visits, prescription medications, dental care, vision services, and certain medical equipment. Physical therapy, chiropractic services, and psychological counseling are also eligible. However, expenses solely for general health improvement, such as vitamins, exercise equipment, or cosmetic procedures, are not covered.
Specific Requirements for Massage Therapy
Massage therapy can be an HSA-eligible expense, but it must be for a specific medical purpose rather than general relaxation or stress relief. For coverage, massage therapy must be prescribed by a licensed healthcare professional, such as a physician, chiropractor, or physical therapist. This prescription confirms that the therapy is part of a treatment plan for a diagnosed medical condition or illness.
A document for substantiating massage therapy as a qualified medical expense is a Letter of Medical Necessity (LMN) or a detailed prescription. This letter should specify the patient’s diagnosis and the medical condition being treated. It must also clearly state the recommended type of massage, the frequency of sessions, and the expected duration of the treatment. The LMN should explain how the massage therapy will directly alleviate the specific medical condition or symptoms, rather than simply offering general wellness benefits.
For instance, a massage prescribed for chronic back pain due to a diagnosed spinal condition, or for muscle recovery after a specific injury, would be eligible with a proper LMN. Conversely, massages sought for stress reduction, improving general circulation, or overall well-being are not considered qualified medical expenses. The LMN acts as documentation, demonstrating to the IRS that the massage therapy is medically necessary. If the treatment extends beyond the period specified in the initial LMN, a new letter may be required, often annually.
Using Your HSA and Maintaining Records
When utilizing your HSA for eligible massage therapy, you can use an HSA debit card provided by your account administrator. Alternatively, you can pay for the service out-of-pocket and then reimburse yourself from your HSA. Many individuals choose to pay upfront and save their HSA funds for future, larger medical expenses or for retirement. There is no deadline for reimbursing yourself for qualified expenses, provided the expense was incurred after your HSA was established.
Maintaining thorough records is important for all HSA transactions, particularly for expenses like massage therapy that require specific medical justification. You should retain detailed receipts for each massage session, noting the date of service, the service provider, and the cost. You must also keep the original Letter of Medical Necessity or prescription from your healthcare provider. These documents serve as proof of medical necessity in case of an audit or inquiry from the IRS or your HSA administrator.
The IRS requires account holders to maintain sufficient records to demonstrate that all distributions were exclusively for qualified medical expenses. If you cannot prove the eligibility of a withdrawal, the amount may be subject to income tax and a 20% penalty if you are under age 65. It is advisable to keep all HSA documentation, including receipts and LMNs, for at least three years after filing your tax return, as this is the audit period. Electronic records are acceptable, but they must be clear and readily accessible.