Many clients utilize Health Savings Accounts and/or Flexible Spending Arrangements along side their High Deductible Health Plan to over medical related expenses they incur each year. The Health Savings Account (HSA) and Flexible Spending Arrangements (FSA) are pre-tax contributions set up by you with the assistance if your employer or through a qualified HSA trustee such as a bank, insurance company, or anyone else approved by the IRS to be a trustee of an individual retirement arrangement.
For those of you that need a refresher, IRS Publication 969 a Health Savings Account (HSA) “is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur.” The benefits include: tax deduction for contributions you or someone other than your employer make to your HSA, contributions made by your employer may be excluded from your gross income, contributions remain in your account until you use them, interest or other earnings on the assets in the account are tax free, the HSA is portable and goes with you if you change employment, and distributions may be tax free if you pay qualified medical expenses.
A health Flexible Spending Arrangement, (FSA) allows employees to be reimbursed for medical expenses and are funded through a pre-tax voluntary salary reduction agreement with your employer. The main differences in the HSA and FSA are that the contributions are made by you and your employer only as well as you have the ability to withdraw funds from your FSA account to pay qualified medical expenses even if you have not yet placed the funds in the account. Your FSA does not follow you like the HSA does, because its a payment arrangement set up specifically with your employer.
What this means is your pre-tax dollars are sent to a fund to assist you in covering your medical expenses that go above and beyond your health plan's deductible. Your qualified medical expenses can be covered if you have one or both options. If you need more information or clarification please contact your HSA or FSA representative.
Now let's look at what a Qualified Medical Expense is defined as by the IRS. Qualified medical expenses are those specified in the plan that would generally qualify for the medical and dental expenses deduction. These are explained in Publication 502. Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for FSA purposes.
A medicine or drug will be a qualified medical expense for FSA purposes only if the medicine or drug:
Requires a prescription, is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or is insulin.
Qualified medical expenses are those incurred by the following persons:
You and your spouse, all dependents you claim on your tax return, your child under age 27 at the end of your tax year, any person you could have claimed as a dependent on your return except that: the person filed a joint return, the person had gross income of $3,900 or more, or you, or your spouse if filing jointly, or could be claimed as a dependent on someone else's 2013 return.
You cannot receive distributions from your FSA for the following expenses:
Amounts paid for health insurance premiums, amounts paid for long-term care coverage or expenses, or amounts that are covered under another health plan. With the HSA the above is true and you cannot receive distributions for health care continuation coverage (COBRA), health care coverage while receiving unemployment compensation under federal or state law, and for Medicare or other health care coverage if you were 65 or older.
Now that we have gotten the refresher out of the way, let us discuss how your HSA and FSA can be used to cover your massage therapy sessions. There is still a large percentage of people and other healthcare professionals that see massage therapy as a luxury. Yes there is a pampering aura about the practice of massage. You see the ads for spa treatments and relaxation massage on TV and in magazines. However, what a majority of professional massage therapists do is far from pampering. More often than not, we are working with clients with specific medical issues that can be relieved with massage therapy. Some of those issues include acute and chronic back pain, arthritis, fibromyalgia, inflammation after exercise, stress, post-traumatic stress in our military veterans, anxiety for chemotherapy patients, and even depression.
The health benefits of regular massage are extensive. Massage therapists provide medical health care to their clients. In a study by the American Massage Therapy Association in October of 2013, 75% of individuals stated their primary reason for receiving a massage in
the past 12 months was medical and stress related. The survey also found that people are changing their opinion of massage. As few as 34% of the folks surveyed still saw massage as only a form of pampering. There also seems to be an increase in doctors referring
their clients for massage.
For those of you with HSA or FSA accounts, your massage therapy sessions are covered under the IRS definition of Therapy. “You can include in medical expenses amounts you pay for therapy received as medical treatment.” Publication 502 Be sure your massage therapist provides you receipts for your sessions that detail the medical treatment you are receiving.
By Barb Pickle, LMT OR#11011 November 26, 2014
IRS Publication 969Health Savings Accounts: http://www.irs.gov/publications/p969/ar02.html#en_US_2013_publink1000204020
IRS Publication 502Medical and Dental Expenses: http://www.irs.gov/pub/irs-pdf/p502.pdf
Massage: Get in touch with its many benefits by Mayo Clinic Staff http://www.mayoclinic.org/healthy-living/stress-management/in-depth/massage/art-20045743
Massage Therapy Styles and Health Benefits http://www.webmd.com/balance/massage-therapy-styles-and-health-benefits?page=3
AMTA Consumer Survey Fact Sheet http://www.amtamassage.org/uploads/cms/documents/consumer_survey_fact_sheet_oct2013.pdf
Scope of Practice Disclaimer: Healing Spirit Touch and the therapists do not diagnose illness, disease or any other physical or mental disorders. Any information imparted by the therapist in the course of treatment should not be construed as such. It is recommended that you see a qualified professional for any physical or mental conditions you may have.
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