Health Savings Accounts (HSAs) and Health Flexible Spending Arrangements (FSAs) may pay for massage therapy sessions making it a good option for better health.
Health Savings Accounts (HSAs)
What are the benefits of an HSA? (From the IRS publication 969)
You may enjoy several benefits from having an HSA.
- You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you don’t itemize your deductions on Schedule A (Form 1040).
- Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income.
- The contributions remain in your account until you use them.
- The interest or other earnings on the assets in the account are tax free.
- Distributions may be tax free if you pay qualified medical expenses. See Qualified medical expenses , later.
- An HSA is “portable.” It stays with you if you change employers or leave the work force.
Qualifying for an HSA
To be an eligible individual and qualify for an HSA, you must meet the following requirements.
- You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.
- You have no other health coverage except what is permitted under Other health coverage , later.
- You aren’t enrolled in Medicare.
- You can’t be claimed as a dependent on someone else’s 2018 tax return.
An HSA takes pre-tax money from your paycheck and places it an account for approved medical spending, and in most HSA’s, massage therapy is covered! Because you never pay taxes on this money, you get a significant savings on qualified expenses.
You can use the special debit card linked to your HSA to pay for treatments, as well. You can also pay for massage with money you’ve already set aside in your HSA.
Flex Spending Arrangements (FSAs)
Using your FSA saves you money by lowering your income taxes. Money you contribute to a flexible spending account is deducted from your pay before your Federal, State, or Social Security Taxes are calculated. This results in a decrease of your taxable income and an increase in your spendable income. This can save hundreds or even thousands of dollars a year.
January is a typical enrollment period so don’t miss out on this opportunity. In short, you will have an opportunity to be reimbursed 100% for the money spent on massage!
A few fast facts about FSAs (From www.healthcare.gov)
- FSAs are limited to $2,650 per year per employer. If you’re married, your spouse can put up to $2,650 in an FSA with their employer too.
- You can use funds in your FSA to pay for certain medical and dental expenses for you, your spouse if you’re married, and your dependents.
- You can spend FSA funds to pay deductibles and copayments, but not for insurance premiums.
- You can spend FSA funds on prescription medications, as well as over-the-counter medicines with a doctor’s prescription. Reimbursements for insulin are allowed without a prescription.
- FSAs may also be used to cover costs of medical equipment like crutches, supplies like bandages, and diagnostic devices like blood sugar test kits.
- See a list of generally permitted medical and dental expenses.
See also: FSAs from the IRS pub 969.
How to use your benefits
You have to know the rules around using your plan. Some may require things like a Letter of Medical Necessity that will need to come from your doctor. Some may require an actual prescription for massage therapy that you will need to keep at home and/or the massage therapist may need to have a copy in their files. Start with asking your HR person/department at work what you will need if the plan is provided through your workplace.
Your physician will need to provide three pieces of information on the prescription:
- Medical necessity: why you need massage therapy (example: to relieve back pain)
- Frequency: number of sessions per month (example: one session per week)
- Duration: length of treatment (example: 3 months)