Is Protein Powder Covered by a Health Savings Account?
Navigate HSA eligibility for protein powder. Learn when it's a qualified medical expense and the essential documentation you need.
A Health Savings Account (HSA) provides a tax-advantaged savings mechanism designed to help individuals cover qualified healthcare expenses. This account is typically available to those enrolled in a high-deductible health plan (HDHP). Funds can be contributed pre-tax, grow tax-free, and be withdrawn tax-free for eligible medical costs. This article clarifies HSA-eligible expenses and addresses whether protein powder falls under these guidelines.
Understanding HSA Qualified Medical Expenses
Qualified medical expenses, as defined by the Internal Revenue Service (IRS), encompass amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease. These expenses also include costs for affecting any structure or function of the body. The IRS provides guidance on these definitions in Publication 502, “Medical and Dental Expenses.”
For an expense to be qualified, its primary purpose must be medical care, not general health improvement, cosmetic reasons, or items that merely promote overall well-being. This distinction is fundamental, as many health-related products may not meet strict IRS criteria. Common examples of qualified expenses include doctor visits, prescription medications, dental work, vision care, and mental health services. Recent legislative changes, such as the CARES Act, have expanded eligible items to include over-the-counter medications and menstrual products without a prescription.
Protein Powder and Medical Necessity
Generally, protein powder is not a qualified medical expense for HSA reimbursement. This is because it is typically used for general health purposes, athletic performance, or dietary supplementation, rather than to treat a specific medical condition. It is categorized as a general nutritional product, which does not meet the IRS’s definition of medical necessity.
However, protein powder may be HSA-eligible if prescribed by a physician to treat a diagnosed medical condition. The prescription must clearly state that the protein powder is medically necessary for the diagnosis, cure, mitigation, treatment, or prevention of a specific disease or illness. For example, a doctor might prescribe protein powder for individuals experiencing malnutrition or significant underweight due to an illness, or as part of a recovery plan following surgery where increased protein intake is needed.
A medical professional might also prescribe protein powder for chronic conditions requiring high protein intake, such as renal diseases, or to counteract muscle loss from certain medications. It could also address sarcopenia, which is age-related muscle loss, or correct specific nutritional deficiencies. In these cases, the protein powder must be an integral part of a treatment plan. If it is a specialty food required for a medical condition, only the additional cost above a similar non-specialty item may be reimbursable.
Documentation for HSA Claims
If protein powder meets the medical necessity criteria, proper documentation is essential for substantiating the claim. The primary document required is a Letter of Medical Necessity (LMN) from a qualified healthcare professional. This letter verifies the protein powder is being used to treat or prevent a specific medical condition, rather than for general wellness.
The LMN should contain specific details. It must include the patient’s name, relevant medical history, a clear diagnosis, and an explanation of how the protein powder directly addresses or treats that condition. The healthcare provider’s name, credentials, and signature are also required, along with the recommended dosage and duration of the treatment.
In addition to the LMN, individuals must keep itemized receipts for all protein powder purchases. It is also advisable to retain Explanation of Benefits (EOB) statements from the health insurance provider. These records should be maintained for at least three to seven years, or as long as the HSA is active, in case of an IRS audit. Failure to provide adequate documentation for an HSA distribution can result in the distributed amount being considered taxable income, subject to a 20% penalty.