Having an HSA is a plus point not only for managing medical expenses but also as a retirement savings vehicle. With the continued elevation in healthcare costs, a savings option for health issues that also facilitates growth is a good way to live life. Although many people ask, can you use HSA for gym membership?
This is a common question because sometimes the health needs gym addons, which can be costly than you think. So, let’s understand what is the range of HSA applications.
Gym Membership and HSA
The direct answer to the question, Can you use HSA for gym membership, is generally no. An HSA (Health Savings Account) is available for qualified medical expenses only. The IRS provides the usage guidelines for this health savings account. The funds of an HSA can be accessed for qualified medical expenses, which include surgeries, pregnancy, doctor’s appointments, etc. Things like exercise, vitamins, or gym membership are considered personal expenses and are not supposed to be covered in an HSA.
Even people think that gym membership helps improve their physical condition, lose weight, or manage stress, so they can be managed using their HSA plan. But this is not true; this account is specifically designed for medical diagnosis and treatment expenses. If the funds of this account remain unused, then the account holder can access these funds as retirement savings after their retirement.
Why Aren’t Gym Memberships Covered?
The complete transaction of an HSA is monitored and maintained by the IRS (Internal Revenue Service). And it sets a restrictive guideline over the usage of this account. The funds can only be used for:
- For the diagnosis, cure, mitigation, treatment, or prevention of a specific disease or condition.
- Primarily meant to affect a function or structure of the body in a medically necessary way.
However, if you withdraw money from an HSA, then you need to face a 20% penalty if you are under the age of 65 years, and this withdrawal will be considered as a regular distribution or income, which is taxable.
Can You Use HSA for Gym Membership?
Usually, you cannot use your HSA for gym memberships. However, some medical exceptions allow the account holder to access the funds of this account for some exercise or the related purposes.
With a Letter of Medical Necessity (LMN)
If a person is prescribed a licensed healthcare provider to join a gym membership, which is a part of the treatment, then it is possible to use HSA for this expense. But it is necessary to submit a Letter of Medical Necessity (LMN) with the details of the disease and the requirement of an exercise institution.
The LMN should include:
- Your diagnosed condition
- The prescribed treatment (gym membership or exercise)
- The duration of the treatment
- The medical necessity and how it benefits your condition
If this LMN is not submitted, then the IRS will consider this gym membership as a personal expense and will not allow access to the HSA funds. So, the question Can you use HSA for a personal trainer, is answered as no, you cannot use it.
Examples of Conditions That May Qualify
Conditions like Obesity or morbid obesity, Type 2 diabetes, High blood pressure, Cardiovascular disease, Arthritis or mobility issues, Depression or anxiety, can qualify for an HSA. This is an exceptional scenario, but the actions where the person personally wants to work on these conditions and joins any gym or therapy centre, then the expense will not be covered.
Fitness-Related Expenses That May Qualify for HSA Use
Indeed, expenses like gym memberships are not covered using an HSA. But some fitness-related programs and expenses can come under this account.
- Physical Therapy: If a doctor prescribes physical therapy, then it is eligible for the HSA. Especially when it aids recovery from injury, surgery, or chronic pain.
- Chiropractic Services: These types of therapies are generally covered by an HSA. This often includes physical exercises and movement therapy.
- Weight Loss Programs: Doctor-prescribed weight loss programs for severe conditions like obesity, hypertension, or diabetes, the program (but not meal plans or supplements) may be HSA-eligible.
- Other: Some other expenses, like smoking stopping programs, special exercises for conditions like cardiac rehabilitation or pulmonary therapy, and disability fitness exercise programs are covered in an HSA.
These are some semi-medical purposes for which you can use your HSA account. So, the question, Can you use HSA for gym membership is answered. Always take advice from the healthcare institution and your HSA administration.
Can I Use HSA For Gym Equipment?
You cannot use the HSA funds for buying any gym or exercise equipment. Tools like home gym equipment (treadmills, bikes, resistance bands), Fitness wearables like Fitbit, Garmin, or Apple Watch, are directly considered as a personal expense, even if they are contributing to improving your health.
However, some instruments are there for which the HSA is accessible. Medical tools like heart monitors for cardiac patients can be allowed to be purchased using an HSA account with the help of a doctor’s prescription. Similar to this concern people asks, Can you use HSA for health insurance premiums after retirement
IRS Penalties for Non-Qualified Expenses
As mentioned, the IRS applies some restrictions on the usage of this account. In the case of using the funds of an HSA for non-qualified expense, then you need to face various charges and penalties, including:
If You’re Under Age 65:
- 20% penalty on the amount used
- The expense is also added to your taxable income
If You’re 65 or Older:
- No 20% penalty, but the amount is still taxed if used for non-qualified expenses
It is advised to keep the medical documentation complete and organized. This will help in claiming the amount from an HSA if the expenses are incurred by the doctor’s prescription. Also, take an LMN from your healthcare provider to get the extra expense compensation.
There are some planning associated with an HSA. This health care saving account needs a proper strategy for How much should I have in my HSA at retirement?
Alternatives to Paying Gym Fees With HSA
Many companies provide health and wellness programs or reimbursement for gym membership. If you are working in one of these types of organizations, then you can use the benefits. These benefits are different from your HSA and can help you manage the out-of-pocket expenses.
There are some health insurance policies available that provide health and wellness incentives that can be used for gym memberships. These programs may include subsidized gym memberships, reimbursements for fitness classes, or premium discounts. With the help of these programs, you can not only manage your healthcare costs but also get motivated to work on your body. For this, you need to check your insurer’s and plan’s details, also if you’re eligible for any fitness-related benefits or discounts through your current health plan.
You can choose some community programs where you can pay a low price. Meaning health care or gym memberships with multiple customer options to distribute the expenses. Also, you can go for the HSA withdrawals for doctor’s doctor-prescribed health strategies or some qualified medical therapies.
Conclusion
HSAs are specifically designed for qualified medical expenses and cannot be used for expenses like a gym membership. This is the answer to the question, Can you use HSA for gym membership? But, oddly, an activity so essential to health is excluded. So, for this, IRS allows the account holder to use this account’s funds if an LMN (Letter of Medical Necessity) is provided by a licensed healthcare provider. Some medical expenses, like therapies, cardiac exercises, health care monitoring tools, etc, can be covered using an HSA account.
Always consult to health care provider and your HSA administrator to get the best advice and the right way to use these funds. This ensures you stay compliant, avoid penalties, and get the most value from your tax-advantaged health savings.
Frequently Asked Questions
Can you use HSA or FSA for gym membership?
No, you cannot use your health care savings accounts for any type of personal expenses, like a gym membership. These accounts are generally available for qualified medical expenses.
What is a letter of medical necessity for gym membership?
In cases where your doctor prescribes joining any exercise program or therapy plan as a part of the treatment, then an LMN (Letter of Medical Necessity) is required. This document should be provided by a licensed healthcare provider and submitted to the IRS to get eligibility to use the HSA for these expenses.
What can I use my HSA for?
The HSA is used for qualified medical expenses like surgeries, doctor’s visits, necessary medical expenses, etc. This account is specifically designed for healthcare purposes. If the funds of this account remain unused, then the account holder can withdraw the funds after the age of 65 years without any penalty as a retirement income or retirement savings.
