Can I Use My HSA or FSA to Pay for Health Related Courses?

Deceptive, coercive marketing is everywhere, and as consumers, we need to be wary of companies that may be advertising their courses as "HSA/FSA eligible" just so they can increase sales.  For this reason, it is our responsibility to properly vet these courses to see if they are indeed qualified expenses.  Failure to do so could have an adverse effect on your or your employer's tax situation.

In this article, we will look at some of the factors that will help you determine what makes an online course a qualified expense, so that you can make an informed decision about the courses you purchase — on this website or anywhere else  —and the manner in which you choose to pay for them. 

The IRS describes the most fundamental requirement for something to be considered a qualified expense as follows: "Medical expenses must be primarily to alleviate or prevent a physical or mental disability or illness. They don't include expenses that are merely beneficial to general health." 

To be qualified for tax-free reimbursement from a health account, a product or service must diagnose, cure, mitigate, prevent, or treat an injury, illness, or condition. This includes health-related courses. Two people can purchase the same health-related course, and if one of them has a diagnosable medical condition, that person would be able to claim the course as a qualified expense.  But if the other individual does not have a diagnosable medical condition, that person would be taking the course in the interest of his or her general health only and could not claim it as a qualified expense.

Finally, the item must be on the list of eligible expenses.  You can search your HSA adminstrator's website for a list of qualified expenses.  Some of these items are always eligible.  Others, such as health-related classes, are only eligible when accompanied by a letter of medical necessity.

A Letter of Medical Necessity (LMN) is the second requirement for a health-related course to be considered an eligible expense.  This is a letter from your doctor or other qualified healthcare professional, stating that the health-related course is necessary for the treatment of a diagnosable medical condition.

Many people are under the impression that the LMN is just a "doctor's note" and that acquisition of the LMN will somehow magically transform any expense into an eligible expense.  However, the LMN is only the secondary requirement.  The primary requirement is that the purchase is actually a qualified expense (as explained above). 

In addition, the LMN is more than just a "doctor's note".  The LMN must outline how the classes will help support the treatment process and how long they will last.  Also, an LMN cannot exceed a 12-month time period.  If no duration is listed, the LMN is usually considered to be valid for one year.  Some plan administrators may have specific guidelines (such as being signed by the healthcare professional and it must be dated BEFORE the classes or courses are approved by your plan administator and ultimately  purchased).  Some administrators may also require special forms to be completed and signed by your healthcare professional. 

I recently called my own HSA plan administrator and asked what other factors might maximize the chances of a health-related course being approved as an eligible expense.  While nothing is guaranteed, and each plan administrator has different criteria for evaluating these expenses on a case-by-case basis, some of the following factors may also come under consideration:

1.  Whether the merchant has an eligible MCC.  The merchant category code, or MCC,  classifies merchants and businesses by the type of goods or services provided.  This is helpful in identifying the type of charge on your credit card statement, or  earning cash back rewards for certain categories.  It also prevents HSA and FSA cards from being declined. 

PoisonousPeople.com uses an HSA/FSA eligible MCC based on descriptions of various categories as determined by OSHA.  Should your HSA or FSA card be declined at the point of sale, please contact your plan administrator and consider using another credit card to make your purchase.  You can then apply for reimbursement with your plan administrator.

2.  The goal of the program.  Since the course must be directly related to the treatment of a diagnosable illness, the program should have a clear goal, just like any other course of treatment.  Some signs that the program is goal oriented would include:

• A planned and logically structured curriculum
• Outcomes that are both clearly stated and measurable
• An end date for when the course is expected to be completed
  
  

Monthly memberships and subscription-based offerings that have no clear road map towards a goal, or have no clear end date are less likely to be approved.

3.  Instructor credentials.  The credibility of the instructor teaching the course may also improve the chances of the course being approved as a qualified expense.  A credentialed instructor, such as an instructor who is licensed in a healthcare profession, may add more weight to the decision as opposed to someone who is not credentialed.

4.  Effectiveness.  If there is evidence that the course has a track record for being effective in treating certain conditions in the past, it is more likely to be approved as a qualified expense. 

For example, our Lucid Boundaries program has been taught to thousands of individuals since 2003, including private psychotherapy clients in individual, face-to-face sessions since 2015.  Some of the diagnoses for which the course has been successfully integrated into treatment plans include*:

• Major Depressive Disorder
• Persistent Depressive Disorder
• General Anxiety Disorder
• Social Anxiety Disorder
• Other Specified Anxiety Disorder
• Post Traumatic Stress Disorder
• Other Specific Trauma and Stressor Related Disorder (CPTSD)
• Obsessive Compulsive Disorder (for self and social-related obsessions)

*Please note: While this course was designed by and is taught by a licensed therapist who has used it to treat these conditions in a private psychotherapy setting, taking the course through PoisonousPeople.com does not establish a psychotherapy relationship with the instructor, nor does it diagnose or treat any medical condition.  The difference is that your medical practitioner will be diagnosing and treating your condition, and will write the LMN so that your participation in the course can be considered a part of your treatment strategy.  The course is distinguished from licensed psychotherapy practice because it is strictly a skills-based course.  

Properly vetting courses in advance is an important step in choosing how to pay for health-related classes.  Please remember that there is no guarantee that any health-related class you select will be approved by your plan's custodian.  When in doubt, it may help to call your plan administrator and ask.  

We have adopted a "no discount policy" here at PoisonousPeople.com to eliminate any coercive pressure to purchase courses in a hurry in order to benefit from a time-sensitive coupon, sale, or discount.  This gives you unlimited time to do your research and gather all the information you need to help you make an informed decision about purchasing a course from us.

That said, this is where our responsibility ends.  While this article was written to give you some things to consider, it is not intended to provide tax or legal advice.  For questions on how any health-related courses can be tailored to your specific circumstances, please contact your plan administrator.

Also please note that this article is for information purposes only and does not guarantee that your purchase of any health-related course will be deemed a qualified medical expense. If you use an HSA/FSA card for your method of payment, you acknowledge that you are responsible for:

• Determining whether this purchase will be a qualified medical expense,
• Submitting any and all required information to the IRS, and 
• Paying any taxes and penalties you may receive as a result.
  
  

We hope this helps.  Best of luck to you on your journey towards better health!