I didn’t even know what a health savings account was until a slick-talking guy from New Jersey called the consulting firm I was working for in 2009 and spent hours on the phone with me singing the praises of these 21st century health-care funding tools. “If you’re young, an HSA is a perfect savings tool,” he explained to me. “Especially if you don’t have any regular health problems, it allows you to bank all of that money tax-free and put it toward your retirement.”
A health savings account — or HSA — is intended as a tool for helping individuals to decide how or when to seek medical treatment, since there’s a financial advantage to not seeking medical treatment unless it’s absolutely necessary. (And again, the added bonus is that they’re not subject to federal income tax.) Or, as it was explained to me by my client from New Jersey: “Someone relying on insurance might go to the hospital to have the doctor take a look at their sore throat, but if they knew they were taking money out of their own pocket by seeking treatment, they might just drink some tea instead. Of course, this only works if you pair the HSA with a high-deductible health plan.”
In short, HSAs are meant to be used to pay for qualifying medical expenses, which often leads to analysis of what it means for something to qualify as a medical expense, followed by simultaneous debate over what different factions believe should qualify as a medical expense. Among the foremost items on the list of gray-area expenses are gym memberships. They can clearly contribute to physical health, but aren’t neatly defined as medical by their very nature.
Can I pay for my gym membership with my HSA?
Depending on the way the scenario is framed, the answer to this question may be “definitely yes,” “technically yes” or “no.”
Here’s what is meant by “technically yes”: The funds contained within an HSA can absolutely be withdrawn at any time, and for any reason. So if you desire to apply them to defray the expense of your gym membership, you should go for it. However, without employing any additional steps to establish that the gym membership is being acquired for a medical purpose, you’re unlikely to be able to retain the pre-tax advantage. This will essentially defeat the purpose of the HSA, as you’ll be using cash from the HSA account, but it’ll lose its protection from taxation, and the scenario will be no different than if you paid for the gym membership out of your own pocket.
In order for a gym membership to qualify as a “definite yes,” you would need to acquire a letter of medical necessity — or an LMN — from a doctor. One legitimate scenario in which this might pass muster would be if you required access to a pool in order to complete physical therapy. In that case, you could locate a gym with a pool, and a doctor-drafted LMN could be submitted to the HSA administrator for reimbursement from your HSA account.
Other cases might be tougher, since “medical necessity” is supposed to be an essential requirement. It may be theoretically possible to convince a doctor to write you an LMN that prescribes a treatment for obesity necessitating access to a gym. However, since the foremost contributing factor to obesity is usually diet-based, and there are ordinarily calorie-burning regimens that don’t mandate access to treadmills, ellipticals and other pieces of equipment — i.e., the pavement on the public street is usually accessible free of charge — an HSA administrator may look upon you less favorably than you’d like.
But shouldn’t a gym membership qualify as a medical necessity? It’s certainly a health-oriented purchase, isn’t it?
It would seem that “medical necessity” is the fine line here, but that line has become blurred over time. Among the “necessities” that have qualified for HSA reimbursement are laser eye surgery, vasectomies and acne laser treatments. Each would seem to occupy a treatment spectrum ranging from optional to essential depending on the situational circumstances involved, but none of them address the issue of general physical wellness as broadly as a gym membership.
Even so, this also seems to be an area where the behaviors of the average gym member defeat the efficacy of the argument. By some estimates, 82 percent of gym memberships are used less than once per week and 63 percent go completely unused. To say nothing of what it means to “use” a gym membership, since time spent in a hot tub or sauna is usually going to be of less value than time spent climbing imaginary floors on a stepmill.
Still, it’s kinda stupid that preventive health care like gym memberships aren’t considered a “medical necessity,” and that HSAs should only pay out once your health has deteriorated enough that you require medical care. To that end, I’m not sure it’s money that really needs saving here.