Can You Use Your HSA for a Gym Membership?

Health savings accounts (HSAs) allow individuals with high-deductible health plans to set aside pre-tax money for medical expenses. Some may consider using HSA funds for non-traditional expenses like gym memberships. While gym memberships can improve health, only qualified medical expenses are covered. Here's what you need to know.

A financial advisor can help you assess how contributing to an HSA could fit into your tax planning, medical expense planning and long-term investment strategy.

Health Savings Account Basics

An HSA is a savings account with tax benefits designed to help individuals pay for medical expenses. It is only available to those enrolled in a high-deductible health plan (HDHP) .

One of the main benefits of an HSA is its triple tax advantage. Contributions are made with pre-tax dollars, which lowers your taxable income . The account grows tax-free and withdrawals for qualified medical expenses are also tax-free.

HSAs are flexible because contributions roll over year after year, unlike flexible spending accounts (FSAs) , which require you to use the money within the plan year. This rollover feature allows you to build up savings over time, which can help cover healthcare costs in retirement.

For 2024, the IRS sets the HSA contribution limit at $4,150 for individuals and $8,300 for families, with a $1,000 catch-up contribution for those 55 and older. Some HSA providers also offer the option to invest the funds in stocks, bonds, or mutual funds , potentially increasing your savings for the long term.

HSA Qualified Expenses

HSAs cover many medical expenses, but not all health-related purchases qualify. To avoid taxes or penalties, the expense must meet the IRS definition of a qualified medical expense. Common examples include:

• Doctor visits and hospital stays: Payments for visits to a physician, hospital services and medical treatments are covered by your HSA. This includes co-pays, deductibles and even certain surgeries.
• Prescription medications: HSA funds can be used to pay for prescribed medications, as well as over-the-counter drugs if they are prescribed by a healthcare provider.
• Dental and vision care: Dental cleanings, orthodontics, eye exams and corrective eyewear such as glasses or contact lenses are considered qualified expenses.
• Medical equipment: Medical devices like crutches, wheelchairs and blood glucose monitors are also covered by HSA funds.

Although HSAs are flexible, wellness expenses like vitamins or elective cosmetic procedures usually don’t qualify as medical expenses. It’s important to check with your HSA provider and review withdrawal rules , as non-qualified expenses will lead to taxes and penalties.

Is a Gym Membership Covered By Your HSA?

Gym memberships are generally not considered qualified medical expenses under IRS guidelines. While physical fitness is important, gym memberships are typically viewed as personal or recreational expenses rather than a medical necessity. So using HSA funds for them could result in taxes and penalties.

There are some exceptions. If a doctor prescribes a gym membership as part of a treatment plan for a specific medical condition, such as obesity, diabetes, or post-surgery rehabilitation, it may qualify as a medical expense. But, be sure to consult your HSA provider and get proper documentation from your doctor to comply with IRS rules.

For other health-related expenses, your HSA can be used for items like physical therapy, chiropractic care, or weight-loss programs prescribed by a doctor, as these are more likely to meet the criteria for medical necessity.

Bottom Line

HSAs can be useful for managing healthcare costs, but gym memberships usually don’t qualify as a medical expense. Though there are exceptions. Make sure any expense meets the IRS definition of a qualified medical expense to avoid taxes and penalties. For maintaining health with HSA funds, consider other qualified expenses like doctor visits, prescription medications, or wellness programs for specific health conditions.

Health Savings Tips

• Health expenses can eat into your nest egg fast. A financial advisor could help you create a plan to save for retirement and pay for health expenses. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now .
• While an HSA isn't designed specifically for retirement savings, you could use this account to supplement your nest egg. The money in your HSA carries over year to year, so if you stay healthy in retirement, you could withdraw money from your HSA to pay for day-to-day living expenses or other costs. But, you'll pay income tax on those distributions.

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