🧠 Food for thought

Implications, context, and why it matters.

Health Savings Account (HSA) and Flexible Spending Account (FSA) eligibility depends on Internal Revenue Service (IRS) rules that require a physician-diagnosed condition rather than general wellness

• IRS allows deductions only for costs that “alleviate or prevent a physical or mental disability or illness” and excludes items “merely beneficial to general health.” Gym memberships or supplements count only in cases such as a membership used solely to treat a disease, for prescribed physical therapy, or when supplements treat a diagnosed condition 1.
• Truemed uses physician letters of medical necessity (doctor documentation for HSA/FSA expenses) to link spend to diagnoses. IRS says a gym membership qualifies only if “purchased solely to treat a specific disease” or for prescribed physical therapy, and exercise for general health stays non-deductible even with a doctor recommendation 1.
• Gray areas remain. Plan administrators or the IRS may argue a product serves general wellness rather than a diagnosed condition.
• The Navia Benefit Solutions deal signals benefits administrators, third-party administrators that run employer programs, can add preventive care to HSA/FSA offerings to boost use and draw health-focused workers.
• Payment processors and ecommerce platforms for fitness, sleep, or nutrition sellers can add HSA/FSA as a payment option to help more shoppers finish checkout. Truemed says 30% average savings drive purchase intent for eligible users.
• The Personal Health Investment Today (PHIT) Act, proposed U.S. legislation that would broaden fitness and wellness eligibility, could expand categories beyond diagnosed conditions 2. Early adopters would gain a head start. Investors should track IRS updates and plan administrator adoption rates.