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Guest Bob W

Fitness (health) club memberships eligible for reimbursement under a c

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Guest Bob W   
Guest Bob W

Are the normal fitness club memberships eligible under a cafeteria plan under a medical spending account? Thanks for your help.

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Dave Baker    61

From :

<blockquote>Medical care expenses include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any part or function of the body. The expenses must be primarily to alleviate or prevent a physical or mental defect or illness. Expenses for solely cosmetic reasons generally are not expenses for medical care. Also, expenses that are merely beneficial to one's general health (for example, vacations) are not expenses for medical care. [Emphasis added.]</blockquote>

I think that unless something qualifies as a "medical expense," it can't be reimbursed under a cafeteria plan's medical expense reimbursement account - see

http://benefitslink.com/boards/index.php?showtopic=6621

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Guest kabmaxx   
Guest kabmaxx

It is my understanding that if a doctor writes a prescription for an employee to join a health club, that is a reimburseable medical expense under an FSA.

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Guest Flex-plan.com   
Guest Flex-plan.com

As the leading Flexible Spending Account TPA I can confidently state that Health Club Membership dues are definitely not a qualifying expense.

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Guest kabmaxx   
Guest kabmaxx

I'm still not positive -

From the IRS Pub 502: Health Club Dues - You cannot include in medical expenses health club dues...for your general health or to relieve physical or

mental discomfort not related to a particular medical condition.

What about for someone with a heart condition related to obesity or lack or exercise whose doctor suggests that he/she begin a fitness program?

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Guest Flex-plan.com   
Guest Flex-plan.com

In all honesty we haven't ever apporoved heath club dues in over 12 years of claim adjudication. I think the IRS would tell the person that is trying to use health club dues that they need to get a private ruling, which cost $500 from the IRS.

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Guest kabmaxx   
Guest kabmaxx

How would someone obtain a private ruling? Who initiates that? The issue is that our present FSA administrator's materials lists health club fee's prescribed by a physician as eligible expenses. Some of our employees have actually been reimbursed for those expenses.

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Guest Flex-plan.com   
Guest Flex-plan.com

The IRS issues a private ruling. If an idividual wants to recieve a private ruling and they have an income under $150K then it will cost them $500.

Unfortunately, most of this particular law is open to interpretation. It is our stance that if a person wants to have their health club membership run through a 125 plan they need to get a private ruling. If your plan is audited the IRS will probably question that expense.

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GBurns    17

1. The original post stated "normal" membership. Normal memberships are discretionary.

2. Pub 503 states "to alleviate or prevent".

3. IRC and Treas Regs 105 etc allow for cure and treatment.

Item 1 is not allowable since it is "merely beneficial" as per Pub 503 etc.

Expenses under 2 & 3 are allowable but I suggest that you get a prescription thereby certifying the "physical or mental defect or illness" needing the "cure, mitigation, treatment" etc.

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Guest jgroves   
Guest jgroves

Having just gone through this, health club and membership fees are not eligible for MSA unless part of prescirbed medical regimen to treat a specific condition. Our plan requires a written copy of a statement from the persons physician stating the medial necessity of the prescribed regiment.

I do have an opinion on this very subject from an attorney. If you want more details feel free to contact me.

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Alf    0

As a technical matter, everything can be deductible if you follow all of the traps and have facts on your side. The classic business school example is that the cost of building a swimming pool can be deductible as a medical expense if certain very favorable facts are present. As a matter of policy, however, the administrator should reject unusual items such as health club memberships to avoid having to made these factual determinations. If a participant is adamant, make them justify the reimbursement under existing law or get a PLR.

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