When is Cryotherapy an HSA Eligible Expense?

Health Savings Accounts (HSAs) offer a tax-advantaged way to save for healthcare expenses. These accounts allow individuals to set aside pre-tax funds that can be used for qualified medical costs, providing a valuable financial tool for managing health-related expenditures.

Cryotherapy, a treatment involving exposure to cold temperatures, has various applications, and understanding its eligibility for HSA reimbursement is important for those considering this option. This article clarifies the conditions under which cryotherapy expenses may be considered eligible for HSA use.

HSA Eligible Expenses Defined

The Internal Revenue Service (IRS) outlines specific criteria for what constitutes a qualified medical expense eligible for HSA reimbursement. Generally, these expenses must be incurred primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease. This also includes costs for treatments affecting any structure or function of the body.

The intent behind the expense is paramount, focusing on genuine medical necessity rather than elective choices. Expenses that are solely for general health improvement, cosmetic purposes, or to enhance appearance are typically not considered eligible. For certain treatments, a recommendation or prescription from a licensed medical professional, such as a doctor, physician assistant, or nurse practitioner, is often required to establish medical necessity.

Types of Cryotherapy and Their Purpose

Cryotherapy encompasses various applications, each with a distinct purpose. Medical cryotherapy, often termed cryosurgery or cryoablation, involves the precise application of extreme cold to destroy abnormal or diseased tissue. This method is used by healthcare providers to treat conditions such as warts, skin tags, and precancerous lesions. It also serves as a treatment for certain cancers, including those affecting the cervix, prostate, liver, and bone.

In contrast, other forms of cryotherapy are utilized for general wellness, athletic recovery, or cosmetic enhancements. Whole-body cryotherapy, for example, is frequently promoted for reducing general muscle soreness, improving well-being, or for anti-aging purposes. These applications typically do not target a specific diagnosed medical condition. The distinction in purpose is a key factor in determining HSA eligibility.

Determining Cryotherapy’s HSA Eligibility

Cryotherapy expenses are eligible for HSA reimbursement only when they directly address a specific diagnosed disease or medical condition. A qualified medical professional must recommend or prescribe the cryotherapy as a necessary part of the patient’s treatment plan.

For example, cryosurgery performed to remove skin cancer, treat specific warts, or manage pain from a physician-diagnosed arthritic condition would generally qualify. Conversely, whole-body cryotherapy sessions for generalized muscle recovery after exercise, enhancing athletic performance without a specific injury diagnosis, or for cosmetic skin tightening would typically not be eligible. Eligibility hinges on a clear medical purpose, evidenced by a professional diagnosis and recommendation, rather than a broad desire for wellness.

Record Keeping for HSA Reimbursement

Maintaining meticulous records is a requirement for all HSA-eligible expenses, ensuring compliance with IRS substantiation requirements. Account holders should retain detailed receipts or invoices that clearly show the service received, the date it was rendered, and the amount paid. This documentation provides proof of the expense.

In addition to payment records, documentation from a qualified medical professional is often necessary. This might include a letter of medical necessity, a prescription, or relevant medical records that explicitly state the cryotherapy was recommended or prescribed for a diagnosed medical condition. These records should be kept for an extended period, typically at least seven years, in case of an IRS audit.