Is a Sauna FSA Eligible With a Letter of Medical Necessity?

A Flexible Spending Account (FSA) offers a valuable way to manage healthcare costs. This employer-sponsored benefit allows individuals to set aside pre-tax money from their paychecks for eligible out-of-pocket medical, dental, and vision expenses. The primary purpose of an FSA is to provide a tax advantage, as contributions are exempt from federal income and payroll taxes, effectively reducing an individual’s taxable income.

Understanding FSA Eligibility for Medical Expenses

For an expense to qualify for FSA reimbursement, it must meet specific criteria established by the Internal Revenue Service (IRS). Eligible medical expenses are defined as costs incurred for the “diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.” The expense must be primarily for a medical purpose, not merely beneficial to general health or for cosmetic reasons.

For instance, general health items like vitamins or gym memberships are typically not covered unless prescribed for a specific medical condition. IRS guidance emphasizes that medical necessity is the determining factor. If an item or service has a dual purpose, meaning it can be used for general wellness but also has a medical application, it often requires additional documentation to prove its medical necessity.

Sauna Expenses and FSA Coverage

Saunas are generally considered wellness or luxury items and are not automatically eligible for FSA reimbursement. However, a sauna expense can become eligible if specifically required to treat a diagnosed medical condition. This is where a Letter of Medical Necessity (LMN) becomes important. An LMN is a formal document from a licensed healthcare provider that verifies the sauna is medically necessary for your health needs.

The LMN must detail the patient’s medical condition, including the diagnosis, and explain how sauna use will diagnose, treat, or alleviate that condition. It should also specify the recommended duration or frequency of use. Licensed healthcare providers, such as physicians, nurses, physical therapists, or occupational therapists, can provide an LMN. While the LMN proves medical necessity, it does not guarantee reimbursement, as the FSA administrator still reviews the claim. An LMN typically remains valid for up to one year, or the duration specified by the provider, after which a new letter may be needed if treatment continues.

Submitting Your FSA Claim

Once you have incurred an eligible expense and, if necessary, obtained a valid Letter of Medical Necessity, the next step is to submit your claim for reimbursement. Most FSA administrators offer multiple convenient methods for submission, including online portals, mobile applications, or mail. When submitting, you will typically need to provide an itemized receipt that clearly shows the provider’s name, the date the service was provided, the patient’s name, a description of the service or item, and the dollar amount.

If your expense involved insurance, an Explanation of Benefits (EOB) form may also be required. For expenses that require an LMN, ensure this document is included with your claim submission, as it substantiates the medical necessity of the expense. After submission, claims are typically processed within a few business days, though high-volume periods can extend this timeframe. Reimbursement is usually issued via direct deposit to your bank account or by check.