IRS FAQs Address Medical Expenses Related to Nutrition, Wellness, and General Health

(Parker Tax Publishing April 2023)

The IRS posted frequently asked questions (FAQs) that address whether certain costs related to nutrition, wellness and general health are medical expenses that may be paid or reimbursed under a health savings account (HSA), health flexible spending arrangement (FSA), Archer medical savings account (Archer MSA) or health reimbursement arrangement (HRA). The FAQs address issues such as whether the cost of nutritional counseling, weight-loss programs, gym memberships and treatment for substance use disorders are considered medical expenses that may be paid or reimbursed under an HSA, FSA, Archer MSA or HRA. IR-2023-47.

Background

Code Sec. 213(a) generally allows a deduction for expenses paid during the tax year for medical care if certain requirements are met. Expenses for medical care Code Sec. 213 also are eligible to be paid or reimbursed under a health savings account (HSA), health flexible spending arrangement (FSA), Archer medical savings account (Archer MSA), or health reimbursement arrangement (HRA). However, if any amount is paid or reimbursed under an HSA, FSA, Archer MSA, or HRA, a taxpayer cannot also deduct the amount as a medical expense on the taxpayer's federal income tax return.

Code Sec. 213(d) defines medical expenses as the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. They also include the costs of medicines and drugs that are prescribed by a physician.

Under Reg. Sec. 1.213-1(e)(1), medical expenses must be primarily to alleviate or prevent a physical or mental disability or illness. They do not include expenses that are merely beneficial to general health.

Frequently Asked Questions (FAQs)

On March 17, the IRS posted FAQs in IR-2023-47 that address whether certain costs related to nutrition, wellness, and general health are medical expenses under Code Sec. 213 that may be paid or reimbursed under an HSA, FSA, Archer MSA, or HRA. Specifically, the following guidance was provided in the FAQs:

Dental exams, eye exams, and physical exams. Expenses for dental exams, eye exams, and physical exams are medical expenses that can be paid or reimbursed by an HSA, FSA, Archer MSA, or HRA, because they provide a diagnosis of whether a disease or illness is present.

Drug and alcohol treatment and smoking cessation programs. Expenses for programs to treat a drug-related substance abuse disorder, alcohol use disorder, or for smoking cessation can be paid or reimbursed by an HSA, FSA, Archer MSA, or HRA, because they treat a disease (substance use disorder, alcohol use disorder, and tobacco use disorder, respectively).

Therapy, nutritional counseling, and weight loss programs. Expenses for therapy, nutritional counseling, weight loss programs, or gym memberships may be paid or reimbursed by an HSA, FSA, Archer MSA, or HRA if certain conditions are met. The therapy or counseling must be treatment for a disease - for example, an amount paid for therapy to treat a diagnosed mental illness is a medical expense, but an amount paid for marital counseling is not. The cost of nutritional counseling or a weight loss program is a medical expense if it treats a specific disease diagnosed by a physician (such as obesity or diabetes, hypertension, or heart disease).

Gym memberships. The cost of a gym membership is a medical expense only if the membership was purchased for the sole purpose of affecting a structure or function of the body (such as a prescribed plan for physical therapy to treat an injury) or the sole purpose of treating a specific disease diagnosed by a physician (such as obesity, hypertension, or heart disease). Otherwise, the cost of a gym membership is for the general health of the individual and is not a medical expense. The cost of exercise for improvement of general health (such as swimming or dancing lessons), is not a medical expense, even if recommended by a doctor.

Food or beverages purchased for weight loss. The cost of food or beverages purchased for weight loss or other health reasons is a medical expense that can be paid or reimbursed by an HSA, FSA, Archer MSA, or HRA, only if (1) the food or beverage does not satisfy normal nutritional needs, (2) the food or beverage alleviates or treats an illness, and (3) the need for the food or beverage is substantiated by a physician. The medical expense is limited to the amount by which the cost of the food or beverage exceeds the cost of a product that satisfies normal nutritional needs. If any of the three requirements is not met, the cost of food or beverages is not a medical expense.

Nonprescription drugs. Except for the cost of insulin, the cost of nonprescription (over-the-counter) drugs and medicines is not a medical expense that is deductible under Code Sec. 213. However, the cost of over-the-counter drugs and also menstrual care products may be paid or reimbursed by an HSA, FSA, Archer MSA, or HRA.

Nutritional supplements. The cost of nutritional supplements is a medical expense that can be paid or reimbursed by an HSA, FSA, Archer MSA, or HRA, but only if the supplements are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. Otherwise, the cost of nutritional supplements is not a medical expense.

For a discussion of the deductibility of medical expenses, see Parker Tax ¶82,501. For a discussion of HSAs, see Parker Tax ¶81,105. For a discussion of FSAs, see Parker Tax ¶120,135. For a discussion of Archer MSAs, see Parker Tax ¶81,505. For a discussion of HRAs, see Parker Tax ¶120,125.

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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