Is Physical Therapy an HSA-Eligible Expense?
Clarify how physical therapy expenses fit into your Health Savings Account (HSA). Understand eligibility rules for tax-advantaged spending.
Health Savings Accounts (HSAs) offer a tax-advantaged way to save and pay for qualified medical expenses. These accounts provide a triple tax benefit: contributions are tax-deductible, funds grow tax-free, and withdrawals for eligible medical costs are tax-free. This article clarifies the eligibility of physical therapy expenses for HSA reimbursement, outlining qualification conditions, necessary documentation, and expenses that typically do not qualify.
When Physical Therapy Qualifies
Physical therapy expenses generally qualify for HSA reimbursement when for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. Physical therapy is specifically listed as an eligible expense in IRS guidance, provided it meets these criteria.
For physical therapy to be HSA-eligible, it must be medically necessary and typically prescribed or recommended by a qualified medical professional. This includes evaluations, ongoing therapy sessions, and medical supplies or equipment recommended as part of the treatment plan. Qualifying situations often include rehabilitation after an injury, chronic pain management, or recovery following surgery. Medical necessity means the treatment alleviates or prevents a physical or mental illness or defect, not merely for general health improvement.
Required Documentation
Individuals should maintain thorough records to substantiate that physical therapy expenses are HSA-eligible, especially in case of an IRS inquiry or audit. Key documents include a prescription or referral from a doctor or other licensed healthcare provider, confirming the medical necessity of the physical therapy. This prescription should detail the diagnosis, recommended treatment plan, and treatment duration.
Detailed invoices or statements from the physical therapy provider are essential. These documents should clearly show the services rendered, dates of service, and associated costs. Explanation of Benefits (EOB) statements from the health insurance company, if applicable, can also provide supporting evidence that the services were medically related. Organizing records in a systematic way helps ensure easy access for substantiation.
Expenses That Do Not Qualify
Not all physical therapy-related activities or expenses are eligible for HSA reimbursement. Expenses incurred for general health improvement, wellness, or cosmetic purposes that are not directly linked to a specific medical condition typically do not qualify. For instance, a gym membership or personal training sessions undertaken solely for general fitness, rather than as part of a prescribed treatment for a diagnosed medical condition, would not be HSA-eligible.
Similarly, massage therapy not prescribed for a specific medical condition, or over-the-counter pain relief not recommended as part of a treatment plan, usually falls outside the scope of eligible expenses. The distinction lies in whether the expense is primarily for the prevention or alleviation of a physical or mental illness or defect, as opposed to simply being beneficial to overall health. If there is uncertainty, a Letter of Medical Necessity from a healthcare provider can sometimes qualify an otherwise non-eligible expense, by clearly stating its medical purpose.