Need to spend those pre-tax health dollars? Food and exercise may qualify.
You can now use your pretax dollars to pay for certain types of healthful foods, gym memberships and even fitness trackers.
Health Savings Accounts (HSAs) and Flexible Savings Accounts (FSAs) allow you to set aside money on a pretax basis to pay for "qualified medical expenses," including medical, dental, prescription and vision bills. But many people don't realize they may be eligible to spend the funds on a range of other options, including certain meal kits, gym memberships, protein powders, supplements, fitness trackers and even saunas.
The meal kit company Daily Harvest started accepting HSA and FSA funds this year after it partnered with a service called Truemed, which works with eligible businesses and helps customers determine if they are eligible to spend HSA and FSA funds on certain health-related products and services. In addition to Daily Harvest, the company has partnered with a variety of health and fitness companies, including CrossFit, Barry's, CorePower Yoga, InsideTracker, and Viome, which offers gut microbiome tests and personalized diet plans.
Truemed has so far partnered with only a handful of food retailers, including Sakara, a delivery service for plant-based foods that offers meals such as smoothie bowls, veggie burgers and a "winter sun salad" made with tricolor quinoa, roasted carrots, Brussels sprouts and honey-dijon dressing. But Calley Means, a co-founder of Truemed, said the company plans to announce more partnerships with other large food brands soon.
Here's how it works. You can begin at Truemed and click on the "where to shop" portal. You can shop by category, choosing from healthy food, supplements, fitness, health tech, saunas and cold plunges, sleep and home or mental health. Or you may be on a company website that says "HSA/FSA eligible with Truemed." Clicking on either of these options will take you to a form to determine if you're eligible. If you are, Truemed will generate a "letter of medical necessity" - essentially a food or exercise prescription - from a doctor.
Once approved, you typically can pay for your food, membership or other item with your PayFlex card, or you can pay with a credit card and then submit the receipt and proof of medical necessity through your HSA/FSA accounts to be reimbursed. In most cases, there is no cost to the consumer, but a few merchants may ask the customer to pay the $30 fee. Means says Truemed uses the highest level of data-privacy protection and does not sell your email address or other information.
Means, a former food industry lobbyist, said Americans collectively have about $150 billion in their HSA and FSA accounts. But that money is mostly spent on pills and procedures to treat chronic diseases rather than to prevent them. That is in part because many people with these accounts are not aware that it is possible under federal law to spend their HSA and FSA funds on nutritious meals and gym memberships.
"The HSA is really good public policy because it gives the consumer choice," Means said. "It asks the question, 'Do you want to save that money to get sick or do you want to spend that tax-advantaged money on food to get healthy?'"
While Truemed has begun offering HSA/FSA-eligible food and fitness products that require a medical necessity letter, other websites, including HSA Store and FSA Store, also offer a variety of gadgets and surprising items that also can be purchased with tax-free dollars, including menstrual products, heating pads, home first-aid kits, massagers and acne and skin-care treatments. And some products, such as the Oura ring tracker, allow customers to use their PayFlex cards at checkout.
Sarah, a software engineer who goes by the handle @bbysarita on TikTok, has used her HSA account to pay for visits to the doctor and to purchase things like sunscreen and a pair of Therabody compression boots. But only recently did she discover that she could use her HSA account to buy food. (Sarah asked to use only her first name to protect her privacy.)
In November, she got an email from Daily Harvest announcing that customers could use their health savings or flexible spending accounts to purchase plant-based frozen meals such as banana almond smoothies, chickpea and coconut curry bowls and black bean chili.
"They have things like mint chocolate smoothies, which I would not have the time or energy to shop for and meal prep myself," she said in an email. "They also have microwaveable vegetable dishes, which are great to take to school or work."
She was so excited about her tax-free meal plan that she posted a video about it on her TikTok account, where she has 42,000 followers (She said Daily Harvest did not pay her to post the video).
"Once I saw they were accepting HSA, this became not only an economically better choice in terms of both time and finances, but more enjoyable as well," she said.
Typically, the IRS hasn't allowed pretax dollars to be spent on gym memberships. But you can comply with IRS guidelines by obtaining a letter of medical necessity from a doctor. So long as the doctor explicitly states that you need to exercise to reverse, treat or prevent a specific disease or condition, you're complying with the rules.
"There were forward-thinking doctors writing notes for food and exercise before, but we're bringing that to the masses and making it seamless," said Means. "Our goal is to open this up and steer HSA/FSA money to healthy behaviors."
Although a personal physician also can write a prescription for exercise, many doctors aren't familiar with the idea. Kevin Robertson, a senior vice president at HSA Bank, one of the largest HSA providers, says such use of HSA/FSA funds is rare, mostly "because people don't know" it is possible.
CrossFit and OrangeTheory are among the first gym companies to partner with TrueMed.
"We see exercise as health care," said Jenn Green, who owns a South Carolina CrossFit gym and also manages U.S. affiliate operations for CrossFit headquarters.
She implemented it at her own gym for a trial run, and members and potential members alike were thrilled. Since September, about 500 CrossFit affiliates have signed on to the TrueMed platform.
"We had 10 members sign up in the first week," said Alexis Jaramillo, the owner of the Mt. Tabor CrossFit in Portland, Ore. "They were, like, 'We can use these funds we've already been putting aside that long-term help keep us out of the doctor's office.'"
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