What is a Letter of Medical Necessity for HSA/FSA?

Key Points

1. A Letter of Medical Necessity explains why an expense prevents or treats a medical condition.
2. A Health Savings Account lets you reserve pre-tax money to pay for medical expenses. Some expenses—like exercise and medical massage fees—require a Letter of Medical Necessity to qualify them for HSA reimbursement.
3. Dr. B can help qualifying patients get a Letter of Medical Necessity online with a $15 consultation. 

If you have a Health Savings Account (HSA), you're already a pro at nurturing your physical and financial health. But maybe a medical cost has been surprisingly rejected because it’s not an automatically qualified expense. If so, a Letter of Medical Necessity (LMN) might be your answer.

This article breaks down the tax-savings details about HSAs, qualified medical expenses and Letters of Medical Necessity. Plus, how Dr. B may be able to help you get a Letter of Medical Necessity online for fitness expenses or rehabilitation therapy fees.

What is a Health Savings Account?

A Health Savings Account is one kind of tax-advantaged savings account.

With an HSA, you can deposit a portion of your income into the account and use those funds to pay for medical expenses. At the end of the year, you’ll report the contributed amount on your federal tax return. That amount will be reduced from your taxable income—saving you money!

HSAs come with other tax advantages, too.

You won’t have to pay income tax on any funds you use to pay for medical expenses. You also won’t pay tax on interest incurred in the account. And once you’ve hit retirement age, you can withdraw money from your HSA for any reason. (You will have to pay tax on funds you use for non-medical purposes, though.)

Who is eligible for HSA? (And how do you open an HSA?)

HSAs are available to those with a high-deductible health plan (HDHP).

To qualify in 2025, your health plan must:

1. Have a deductible of at least $1,650 for a single person and $3,300 for a family.
2. Have out-of-pocket maximum expenses that do not exceed $8,300 for a single person or $16,600 for a family.
3. Only cover preventative services before you meet your deductible.

That third point is the stickiest—and why most health plans don’t qualify for HSAs. It means your plan can’t pay for any portion of your doctor visits or medications unrelated to preventative care until you’ve met your deductible.

You also can’t contribute to an HSA if you have Medicare coverage.

If you get your health insurance through your employer, they may offer a Flexible Spending Account (FSA). Like an HSA, you can deposit pre-tax funds into an FSA and use them to pay for qualified medical expenses. So ask your HR department if they have an FSA available. Then, learn more about the difference between HSA and FSA accounts.

Otherwise, qualifying individuals can open an HSA through financial institutions like Lively, Health Equity and Fidelity. Major banks like Bank of America, Wells Fargo and Chase also offer HSA accounts.

What are common HSA-eligible expenses?

Generally speaking, you can use tax-free HSA funds to pay for medical expenses. Most people use their HSA funds for doctor visit copays, prescription drugs, eye care, and dental treatment.

Other qualified medical expenses include:

• Covid-19 prevention tools (disposable face masks and hand sanitizer)
• Over-the-counter medications (acne, allergies, pain reduction, etc.)
• In-patient alcohol and addiction services
• Braces and mobility devices (crutches, slings, arthritis gloves, etc.)
• Fertility + reproductive care (birth control, pregnancy tests, vasectomies and fertility procedures)
• Cancer wigs and breast reconstruction surgery
• Acupuncture, chiropractic care and similar services
• Home improvement related to medical conditions or disability
• Weight loss programs (for conditions like obesity, heart disease or hypertension)
• Travel for medical care (including gas, tolls and parking)
• Psychiatry and therapy sessions

How do you use an HSA to pay for medical expenses?

Depending on your HSA institution, you can pay for medical expenses with HSA funds in two ways:

1. Pay with your HSA card. Most institutions provide an HSA debit card you can use at health providers such as pharmacies and doctor offices.
2. Submit receipts for reimbursement. When you pay for an expense somewhere that doesn’t accept your HSA card, you’ll submit the receipt to your HSA administrator. Once approved, they’ll transfer the amount from your HSA account to your designated checking or other account.

What is a Letter of Medical Necessity—and when do I need one?

HSA withdrawal rules specify what medical expenses can automatically be paid with HSA funds. Copays, eye care, dental care, prescriptions, common over-the-counter medications, and many other items don’t require documentation.

But if an item can also be purchased for non-medical use, you need a Letter of Medical Necessity confirming that it’s a legitimate medical expense. The letter must come from a licensed health provider.

The letter must include:

• Your provider’s name, qualifications and signature
• An explanation of your condition
• How the purchase helps prevent or treat your condition
• The period the treatment is necessary (if unspecified, the letter is valid for one year)

Medical expenses that require a Letter of Medical Necessity include:

• Fitness classes, physical trainers and gym memberships
• Message therapy
• Dietitians and nutritionist counseling 
• Air conditioners, filters or purifiers 
• Alopecia or dandruff treatment
• Breast implant or reduction
• House or car modifications
• Colonics, Chinese herb practitioners, doulas
• Dermatology treatments like dandruff shampoos
• Egg donor fees, storage fees and recipient fees

Can I get a Letter of Medical Necessity Online?

Dr. B makes it convenient for qualifying patients to get a Letter of Medical Necessity online to save on fitness and rehabilitation therapy fees!

For fitness fees:

• If you have a medical condition that can be prevented or treated by exercise, get the details on how to use your HSA or FSA for fitness fees. 
• Then start a $15 fitness consultation with Dr. B to find out if you qualify for a Letter of Medical Necessity online.

For massage therapy:

• If you have an injury, illness or disability that can be eased by massage, learn how you may be able to use your HSA or FSA to pay for massage therapy fees. 
• Then, start a $15 rehabilitation therapy consultation to find out if Dr. B can help you get a Letter of Medical Necessity online.

If you qualify, a licensed provider will send you a Letter of Medical Necessity right to your inbox with instructions for your fitness or rehabilitation therapy treatment.

Sources:

Folks, Jason. IRS bumps up 2025 FSA contribution limits. HealthEquity.

Healthcare.gov. Health Savings Account (HSA).

Healthequity.com. HSA-qualified medical expenses (QME).

Internal Revenue Service. (2023). Publication 969 (2023). Health savings accounts and other tax-favored health plans.

Internal Revenue Service. (2023). Publication 502. Medical and dental expenses.