Does Gym Membership Qualify for FSA?
Maximize your Flexible Spending Account benefits. Learn how specific health-related expenses, like gym memberships, can potentially qualify under IRS rules.
Flexible Spending Accounts (FSAs) offer a tax-advantaged method for individuals to manage healthcare costs. Many people explore ways to maximize these benefits for various health-related expenses, often leading to questions about the eligibility of gym memberships. Understanding FSA reimbursement guidelines helps individuals make informed healthcare spending decisions.
Understanding Flexible Spending Accounts
A Flexible Spending Account is an employer-sponsored benefit that enables employees to set aside pre-tax money to cover eligible healthcare expenses, thereby reducing their taxable income. The funds contributed to an FSA can be used for qualifying expenses for the employee, their spouse, and their dependents.
The “use-it-or-lose-it” rule means any remaining balance at the end of the plan year is typically forfeited. Some plans, however, may offer a grace period of up to two and a half months after the plan year ends, or allow a limited carryover of up to $640 to the next year. Generally, eligible expenses include medical, dental, and vision care, with eligibility determined by Internal Revenue Service (IRS) guidelines, primarily outlined in IRS Publication 502, “Medical and Dental Expenses.”
Gym Membership Eligibility Requirements
Gym memberships are generally not eligible for FSA reimbursement if their primary purpose is for general health improvement, weight loss, or recreation. The IRS considers such expenses to be for overall wellness rather than for the treatment of a specific medical condition. Simply wanting to maintain fitness or achieve general health goals does not qualify a gym membership for FSA use.
An exception exists if a gym membership is medically necessary to treat or alleviate a specific diagnosed medical condition. To qualify, the need for the gym membership must be prescribed by a licensed healthcare professional, such as a doctor, physician assistant, or nurse practitioner. The prescription must clearly state that the gym membership is for the diagnosis, cure, mitigation, treatment, or prevention of a specific disease or medical condition. The expense must not be for general health improvement or a condition that is not a specific medical illness.
Examples of conditions that might qualify with a healthcare professional’s prescription include obesity, heart disease, hypertension, diabetes, or chronic pain, especially if exercise is part of a physical therapy regimen for an injury. A “Letter of Medical Necessity” (LMN) or similar documentation from the healthcare provider is required. This letter must explicitly connect the diagnosed condition with the necessity of the gym membership for treatment, stating the specific medical condition being treated, the recommended treatment, and how it will alleviate the condition.
Submitting a Claim for Reimbursement
Once a gym membership meets the eligibility requirements, individuals can submit a claim for reimbursement. The essential documentation includes the Letter of Medical Necessity from the healthcare provider, which must clearly state the diagnosis and the medical need for the gym membership.
Proof of payment for the gym membership is also required. This includes itemized receipts or invoices that clearly show the service provided, the amount paid, and the date of service. A credit card statement alone is not sufficient as it lacks the necessary detail. These documents are then submitted to the FSA administrator, often through an online portal, mobile application, or by mail. Retain thorough records of all documentation, including the LMN and payment receipts, for personal reference and in case of an audit. While some plans may allow an FSA debit card for direct payment, reimbursement claims are common.