Quick Answer: The IRS allows HSA/FSA funds to be used for anything that diagnoses, cures, treats, prevents, or manages a disease or condition. This includes wellness products - but only when connected to a specific health need through proper documentation (an LMN). "Generally healthy" expenses like random vitamins or casual gym use don't qualify on their own.

From IRS Publication 502 (the official guide):

"Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body."

This is broader than most people think. It doesn't just cover doctor visits and prescriptions - it covers anything that prevents, treats, or manages a health condition.

The IRS draws a clear line:

✅ Eligible: Expenses that are "primarily to alleviate or prevent a physical or mental disability or illness"

❌ Not eligible: Expenses that are "merely beneficial to general health, such as vitamins or a vacation"

This is why a gym membership for fun isn't eligible, but the same gym membership to help manage diagnosed hypertension is. Purpose, not product, determines eligibility.

Many wellness products can be either personal or medical, depending on why you use them. The IRS calls these "dual-purpose items." Examples:

For dual-purpose items, you need a Letter of Medical Necessity (LMN) to document the medical purpose.

Eligible "only if the membership was purchased for the sole purpose of affecting a structure or function of the body... or the sole purpose of treating a specific disease diagnosed by a physician."

Eligible "only if the supplements are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician."

Eligible when treating "a specific disease diagnosed by a physician (e.g., obesity, hypertension, heart disease)." Not eligible for cosmetic weight loss.

Even if "recommended by a doctor for general health improvement," swimming lessons are NOT eligible. General health improvement ≠ medical treatment.

Since 2020, over-the-counter medications are eligible for HSA/FSA without a prescription. This includes: - Pain relievers, allergy meds, cold medicine - Sunscreen (SPF 15+) - Menstrual care products

This is a permanent change, not temporary.

Not necessarily. A doctor's recommendation is different from a formal Letter of Medical Necessity that connects the product to a specific diagnosed condition.

The IRS doesn't care if something is "healthy" in a general sense. It must be connected to a specific medical purpose.

Technically true for HSAs (you'd owe income tax + 20% penalty on non-qualified expenses), but this defeats the purpose. After age 65, the penalty goes away, but income tax still applies.

Most HSA admins don't validate your expenses at all — they just process the withdrawal. The IRS is the one who checks, during an audit (which they can do up to 10 years after a transaction). It's your responsibility to ensure expenses are qualified and keep documentation.

Crates Health connects you with licensed healthcare providers (MD, DO, PA, NP) who evaluate your health profile and issue LMNs only when medical necessity is established. This gives you the documentation the IRS requires, protecting you in case the IRS audits you — which they have the right to do up to 10 years after a transaction.

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