Can you accept insurance for medical fitness/exercise therapy? Can your clients use their FSA & HSA (medical savings account) for your services? The answer to both questions is yes, however, it’s not an easy yes. The only way for your clients to do these two things is if you are billing for qualified medical expenses.

What are qualified medical expenses? Qualified medical expenses are expenses that mitigate, treat, or prevent disease per IRS.gov Publication 502. The IRS narrows the expenses that are deductible even more by limiting the qualified expenses to supplies (example: KT Tape) or an action being billed that will alleviate or prevent disability or illness. The catch for medical fitness/exercise therapy is that general health and well-being are not qualified medical expenses.

So, how can your client use their insurance or medical savings accounts for your services? The client needs their doctor to provide them with a prescription that identifies your services as medically necessary. The doctor saying you really need to lose weight is not a prescription.

What expenses or activities are covered per the IRS Publication 502? One example is a weight loss program for a client with a medical need for weight-loss. The weight-loss program becomes medically necessary when the doctor has diagnosed the client with obesity, heart disease, or some other disease and has determined that your weight-loss program or something similar will help the client improve or alleviate the disease or condition. What isn’t covered as a qualified medical expense are the dues for your club, the weight-loss program for a client without the prescription from the doctor, or the sessions to maintain good health after you fixed the problem your client had a prescription. The key is that a doctor or medical professional has diagnosed a disease and given the client a prescription for your services.

Accepting FSA & HSA is as simple as contacting your credit card processor and making sure you are set up correctly in their system. Most of the time this is as easy as answering a few questions about what you do. Making the decision to accept medical insurance at your facility is a much more extensive process, one that will require you to have a NPI (National Provider Identifier) number and a lot of extra time for the processing, filing, and record-keeping that goes along with dealing with medical insurance companies.

In short, if your client has a medical necessity for your services and their doctor has given them a prescription, then your client can use their FSA or HSA for their sessions. They also may be able to submit their receipts back to their insurance company for reimbursement. If your client doesn’t have a medical savings account or an insurance company that will reimburse them for their expenses, they can collect the receipts for the services, that qualify as medically necessary, and submit them with their taxes to their tax preparer. There are minimum limits that clients must reach before they can start using their medical expenses as itemized deductions. Their tax professional can help them with this.

To learn more about exactly what is and isn’t considered a qualified medical expense refer to the IRS Publication 502: irs.gov/pub/irs-pdf/p502.pdf

Heather Nusbaum is a Certified Management Accountant, Exercise Physiologist, Licensed Massage Therapist, MELT Instructor, and Master Trainer with NASM & ISSA. In 2013, Heather created Paws for Fitness a program to incorporate canines in the workout process. Over the years, this program has become a therapeutic modality within the training protocols of her business Nutree Fitness.

How did Heather go from Accounting and Business to Exercise Physiology? At a young age Heather was diagnosed with ‘Dysfunctional Knees’, this was a label that was attached to describe being in pain 24/7. This pain continued for the next 15+ years. After gaining weight due to age and inactivity, she realized that something had to give in her early 30’s. On her own she picked up and modified a box program and within 1 year had completely removed all the knee pain she’d suffered for the last 15+ years. Over the next few years it became apparent that she could help other people do what she had accomplished by accident, improving their quality of life and moving toward a pain free existence.