Does FSA Cover Gym Membership? What You Need

A Flexible Spending Account (FSA) is an employer-sponsored benefit program allowing employees to set aside pre-tax money from their paychecks to cover eligible healthcare expenses. This arrangement reduces an individual’s taxable income, effectively saving money on taxes for qualified medical costs. The funds allocated to an FSA are available for use throughout the plan year for various out-of-pocket medical and dental expenses.

Eligibility of Gym Memberships for FSA Coverage

Gym memberships are generally not eligible FSA expenses, as they are typically viewed as promoting general health rather than treating a specific medical condition. The Internal Revenue Service (IRS) defines qualified medical expenses as costs for the “diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.” A gym membership usually falls outside this definition for general fitness.

However, a gym membership can become an eligible FSA expense if it is “medically necessary” to treat or prevent a specific medical condition or disease. This requires a healthcare provider to diagnose a medical condition and formally recommend exercise at a gym as an integral part of the treatment plan. Examples of conditions that might qualify include obesity, hypertension, heart disease, diabetes, or those requiring physical rehabilitation. Medical necessity must be clearly established, linking the gym activities directly to the diagnosed illness.

Obtaining a Letter of Medical Necessity

To make a gym membership eligible for FSA reimbursement, a Letter of Medical Necessity (LMN) is required. This document explains why the gym membership is medically necessary for treating or preventing a specific medical condition. A physician, chiropractor, or other licensed healthcare provider can issue an LMN. The LMN must contain specific details, including the patient’s name, the medical condition or diagnosis, and how the gym membership will treat or alleviate that condition.

The letter should also specify the recommended duration of the activity and, if applicable, the specific type of exercise or facility needed. The LMN must be obtained before incurring the gym membership expense, ensuring compliance with FSA regulations. This document serves as official substantiation that the expense is a prescribed medical treatment, aligning with IRS guidelines for qualified medical expenses.

Submitting for Reimbursement

Once the gym membership has been paid for and the Letter of Medical Necessity (LMN) obtained, the next step involves submitting a claim to your FSA administrator for reimbursement. Required documentation includes the LMN and proof of payment for the gym membership. Proof of payment should be an itemized statement or receipt from the gym, clearly showing the date of service, type of service, dollar amount, and provider name. Credit card receipts or bank statements alone are often insufficient as they may lack the necessary detailed information.

Submission methods commonly include online portals, mobile applications, mail, or fax. After submission, the FSA administrator will review the claim to confirm eligibility based on IRS regulations and the provided documentation. Processing times can vary but generally range from a few business days to about a week. If approved, reimbursement is typically issued via direct deposit or a check. Retain all original documents, as additional information may be requested to further substantiate the claim.