At the heart of the issue is a medical necessity letter that requires consumers to purchase health-related products such as nutritious meal plans, gym memberships, fitness trackers, and nutritional supplements. ” (essentially a doctor's note).
Although these notes were written by a doctor, the IRS questions the validity of the doctor's advice. In general, health care providers said medical letters must be the result of face-to-face interactions with patients, either in person or through telehealth visits. Officials say it is not enough to fill out a questionnaire and receive a medical certificate, as is common practice in some companies.
IRS claims pre-tax funds are not for 'health and wellness'
An agency spokesperson said in an interview that food and nutritional supplements are considered medical expenses “rarely” and only under strict circumstances. It's also unclear how the IRS plans to determine which doctor records are legitimate and which are not counted.
“While some companies falsely claim that a doctor’s note based solely on self-reported health information can convert non-medical diet, health, and exercise expenses into medical expenses, this document does not actually This is not the case,” the agency said in a news release.
The agency says funds from HSA and FSA accounts cannot be used to pay for things that promote “general health and wellness” unless consumers meet strict criteria.
Callie Means, co-founder of TrueMed, a company that helps people obtain letters of medical necessity when purchasing items with HSA funds, said the IRS is on shaky legal ground. , said that it was overreaching into the patient-doctor relationship.
He disputed the legitimacy of some doctor's notes and warned that HSA funds can only be used “infrequently” for things like diet and exercise, arguing that HSAs should be used only when people are “medically adjusted.” “Exercise and meal plans” are setting the bar high. than antidepressants or Ozempic. ”
Tax system that favors medicine over prevention
Using surveys and emails to determine medical necessity is a common practice that “has been used to prescribe tens of millions of pharmaceutical interventions,” he said. “Whatever you want to call it, it's an attempt by regulators to disrupt and freeze the tendency for Americans to learn that when they work with their doctors, they can improve their illness with food, not drugs.”
Means pointed to several cases in which the U.S. Tax Court has ruled that special diets prescribed by a doctor can qualify as medical expenses for people with medical conditions.
In a 1976 case, the U.S. Tax Court ruled that men and women with allergies to pesticides and herbicides could deduct a portion of the cost of expensive organic food as medical expenses. In another case, the Tax Court ruled that a man with heart disease who was prescribed a salt-free diet could deduct some of the costs associated with his special diet as medical expenses.
Means said the IRS seems to be suggesting that food is not medicine, which could reduce the incidence of chronic disease by giving Americans better access to nutritious foods. He said it was contrary to the federal government's “food is medicine” initiative, which was launched last year as a goal.
“In the midst of a chronic disease crisis crippling Americans, why would the IRS choose to fight dietary and exercise interventions recommended by doctors to treat certain health conditions?” said Means.
How HSA and FSA funds work
HSAs and FSAs allow people to set aside funds on a pre-tax basis to pay for a wide range of medical and dental expenses, such as prescription drugs, pregnancy tests, and hearing aids. As of last year, Americans held 36 million health savings accounts worth about $116 billion, according to research and investment firm Devenia. About one in four people with employer-sponsored health insurance has a high-deductible health plan with an HSA.
Using HSA and FSA funds to pay for health and wellness products is common practice. Walmart, Target, and other large retailers promote some nutritional supplements, sunscreen, and various other products on their websites as “FSA/HSA eligible.” His HSA Store, one of his popular websites, sells skin care products, electrolyte supplements, massage guns, foam rollers, heating pads, fitness trackers, and other products, and offers customers “amazingly qualified” is advertised.
The IRS announced Please refer to our website for guidance on which products and services are considered medical expenses. However, in some cases, what is and is not eligible remains a gray area.
An IRS spokesperson said some products, such as fitness trackers, may qualify as medical expenses if a person with a medical condition recommends purchasing them from a doctor. However, the spokesperson said there were “rare” circumstances in which items such as food and supplements would be considered medical expenses.
How consumers receive medical letters
To qualify as medical expense, a supplement must be “recommended by a physician” as a treatment for a specific medical condition. Food expenses are considered medical expenses only if they “do not meet normal nutritional needs,” help alleviate an illness, and the need is “substantiated by a physician,” the IRS says. .
According to the agency, a gym membership is not eligible for medical treatment if it is purchased “solely for the purpose of affecting the structure or function of the body (such as a prescribed physical therapy plan to treat an injury)” or if: It may be counted as an expense. Memberships were purchased to treat high blood pressure, heart disease, obesity, or another illness diagnosed by a doctor.
When consumers use Truemed to obtain a letter of medical necessity, they fill out an online form describing their health and medical history, and a remote physician reviews that information. If a doctor determines that a customer needs a particular product or service to treat or prevent a medical condition such as diabetes, heart disease, or obesity, the patient will receive a letter of medical necessity. The customer can then use that letter to justify the purchase as a medical expense and request reimbursement through their healthcare account.
Truemed partners with companies such as CrossFit, Equinox, LA Fitness, CorePower Yoga, and healthy food delivery services Daily Harvest and Saykara.
The lack of face-to-face meetings between doctors and patients appears to have angered authorities. However, it is not clear how IRS, HSA, and FSA administrators can distinguish between medical letters written through in-person visits, those created on video screens, and those created by questionnaires.
And while the agency does not have specific enforcement powers, a spokesperson said the IRS guidance is shared with the Federal Trade Commission and could target companies that engage in false advertising. Ta.
“Legitimate medical expenses have an important place in the tax code that allows for reimbursement,” IRS Commissioner Danny Wuerffel said in a news release Wednesday. “However, taxpayers need to be careful to follow the rules amid aggressive marketing suggesting that personal expenses such as weight-loss meals are eligible for reimbursement even though they are not considered medical expenses. There is.”
Have questions about healthy eating? Email EatingLab@washpost.comWe may answer your question in a future column.
