What exactly is a Health Savings Account (HSA)? The IRS defines an HSA as, “A tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur.” In simpler terms, an HSA is like a personal savings account, but the money in them is used to pay for health care expenses.
HSA funds continue to roll over year by year and grow, and you own them when you leave your employer. At the age of 65, consumers can withdraw the money for any expense (but pay income tax on non-health expenses).
HSA Advantages There are many advantages to an HSA, one, you are not taxed on the money deposited into your account (so you end up paying less income tax every year). Additionally, in most states, your HSA earns interest tax-free.
Qualification To qualify for an HSA, you must be covered under a high-deductible health plan (with no other health coverage), you must not be enrolled in Medicare, and you cannot be claimed as a dependent on someone else’s tax return for 2021.
A high deductible health plan has a higher annual deductible than typical health plans and has a maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. Once you have determined that you are eligible, the maximum contribution for 2021 is $3,600.
HSA for Massage Therapy If you have a client who has a Health Savings Account, they can use the funds from that account to pay for a massage, but there is a catch. The massage can only be paid for using an HSA if the treatment was recommended by a physician to treat a specific injury or to prevent physical or mental ailment.
Here are some examples: back pain, fibromyalgia, arthritis, hypertension, stress, anxiety, depression, and more. Make sure you keep a copy of the physician’s recommendation in writing.
So, be sure to educate your clients. If you know they have an HSA and you are treating them for a physician-recommended treatment, then have them provide a prescription in writing for your records. This will also allow them to pay using their HSA.
Note In the state of Ohio, Massage Therapists are required to collect sales tax on all massage services rendered. Sales Tax rates vary inside each county and are based on where the service was performed.
In order to save money on your massage services and have them claimed as medical expenses, or if you would like to use your Health Savings Account (HSA), or your Flexible Spending Account (FSA) to be reimbursed for your massages, please bring a written prescription from an MD, DO, Chiropractor or Dentist. It should not have a set number of visits and can simply state, “Recommended for massage.” Or print off this one-page referral form for your doctor to sign. If you plan on using your FSA as payment towards your massage sessions, you might need a diagnosis code on the prescription so I can add it to your receipt. Prescriptions are good for one year from the date they are signed.
