Health Savings Accounts (HSAs) are becoming increasingly popular among Americans for their ability to help save on medical expenses, but did you know that these accounts can also be used for gym memberships? This might come as a surprise to some people, but the fact is that HSAs offer a lot of flexibility in terms of what they can be used for. In this article, we will explore the ins and outs of using an HSA to pay for your gym membership.
What is an HSA?
Before understanding how HSAs can be used for gym memberships, let’s first understand what exactly an HSA is. An HSA is a type of savings account that allows individuals with high deductible health plans (HDHPs) to set aside funds pre-tax or tax-deductible dollars specifically intended to pay for their out-of-pocket medical expenses. These funds can then be withdrawn tax-free if used towards qualified medical expenses such as doctor visits, prescriptions, or even some over-the-counter medications.
HSAs have become more popular in recent years because they allow individuals greater control over their healthcare spending and provide significant tax benefits when compared to traditional health insurance plans. Furthermore, any unused funds within your HSA rolls over year-to-year without penalty or expiration.
Can You Use Your HSA For Gym Memberships?
Now coming back to our original question – Can you use your Health Savings Account (HSA) to pay for a gym membership? The short answer is ‘Yes’!
One common myth associated with HSAs is the idea that only healthcare related products and services qualify as eligible expenses- which understandably causes confusion around whether activities like going to the gym fall into this category.
In reality though – yes it absolutely qualifies! That’s right, not only does working out bring obvious physical benefits necessary for good health – it may now even save you money on healthcare costs too through preventing chronic illness and injury!
To add clarity; While we don’t consider gym memberships the same as a healthcare expense, they’re automatically covered by your HSA once you’ve crossed certain thresholds in your spending on health-related expenses. Generally speaking, if you’ve met the requirements of an HDHP, you can use your HSA to cover any health and fitness expenses – including gyms. Also it’s important to note that typically only two visits per week are considered eligible for reimbursement under IRS rules guiding HSAs.
Interestingly enough May 2021 saw a new bill introduced in Congress titled PHIT (Personal Health Investment Today) encouraging Americans to be more active and upfront covering many sports or physical activities expenditures paid during the given year; Eligible criteria such as membership fees need to come from approved club facilities with specialized equipment intended wholly for bodily exercise.”
The fine print!
As always though there’s some fine print involved! – It is worth noting that not all gym related expenses qualify even if covered when reached a certain threshold of healthcare payments. For example monthly dues or initiation fee may be part of qualifying costs but ancillary services fees like personal training sessions probably won’t be allowed – unless specifically prescribed by a doctor due medical reasoning. The key takeaway here is understanding how eligible products may vary based on circumstance so check with professional before making assumptions!
Are There Any Limits?
While HSAs offer great flexibility when it comes to using funds towards qualified medical expenses – including gym memberships – there must still be due diligence around limits and tax-related rules surrounding these withdrawals across different states.
For instance, each state may have their own specific regulations governing what qualifies as an “eligible” expense which has been laid down by either through regulatory guidance documents issued from government agencies or case law determinations set out in relevant court proceedings.
Some examples include:
Cost-sharing limits
Under ACA guidelines this limit ranges accordingly:
$7,000 (individual) / $14k (family)
Going over those amounts placed considerable strain towards point of filing for bankruptcy. HDHP participants will be liable until deductible threshold met.
Annual Account contribution limits
These amounts may also vary depending on whether you have individual coverage or a family plan:
For 2022, the annual HSA contribution limit is $3,650 (for self-only HDHP coverage) and $7,300 (for family HDHP coverage).
There’s additional catch-up contributions available for HSA account holders aged at least age 55 up to a cap of $1k annually to help top-up retirement savings in addition to healthcare spending costs too.
Using Your Gym Membership As Tax-Deductible Expenses
If claiming gym memberships as deductions on your income tax return you should always consult with a tax professional so that they can fully explain all the intricacies involved especially dealing fro eligibility purposes under IRS rules on HSA-related expenses since they’ll also want records supporting those claims that need submitting alongside forms regarding expenditures paid during each filing year typically going back at least five years from creation date.
Conclusion
In conclusion; HSAs are an incredibly flexible tool when it comes to managing healthcare-related expenses including paying off fees associated with working out at gyms. With proper planning and adherence to legal requirements- whilst staying mindful towards any limitations set within state governing laws – one can maximize the value provided by their health savings accounts through utilizing them holistically from preventive care measures right down upskilling knowledge development around maintaining healthy habits over time!