Flexible Spending Account for Massage

Chances are if the economy has zapped your budget, going out for a relaxing massage is not high on your “to do” list unless you have a gift certificate waiting to be used. However, according to certified Virginia massage therapist Rick Morgan, you might not need to tighten your belt when it comes to massage treatments if you’re one of the many Americans with a flexible spending account (FSA).

Morgan, writing in the November 2008 issue of YourHEALTH Magazine, says that while FSAs have become more prevalent over the last few years, many employees fail to spend their entire yearly entitlement. He speculates that this is because they’re unaware of all the expenses the account will cover, among them massage therapy.

For those who haven’t signed up for one yet, an FSA is a tax-advantaged financial account offered by an employer to employees. It allows the worker to designate part of his or her earnings to pay for qualified health-related expenses and is offered through a company’s cafeteria plan of benefits.

The money an employee designates for his or her FSA is subtracted from payroll and is not subject to payroll taxes. In most cases, this creates a significant tax savings. Medical expense FSAs are frequently options with traditional health plans. And with most FSAs, the employee must use all the funds in the account each calendar year.

Unlike an FSA, a health savings account (HSA) allows unspent funds remaining in the employee’s account to roll over to the succeeding calendar year. HSAs are also tax advantaged and are usually offered to individuals who have high-deductible health insurance plans. They are not subject to any Federal income tax when the deposit is made. The individual actually owns the HSA and can use the funds in the account to pay for qualified medical expenses at time any without incurring a Federal tax liability.

According to Morgan, Section 213(d) of the Federal tax code stipulates that a qualified expense must be “to alleviate or prevent a physical or mental defect or illness.”

Based on this definition, Morgan says that not all massage is likely to qualify as a medical expense. However, he points out that therapeutic massage is a frequent part of medical treatment plans for chronic pain and muscle problems in addition to stress-related conditions such as high blood pressure or anxiety. In those circumstances, it’s likely the employee’s plan will cover the expense provided the employee’s physician prescribes it.

To make sure massage is covered, Morgan recommends that employees take several steps:

1. Get a prescription. You can obtain it from any health care practitioner authorized to write an Rx.

2. Find a licensed massage therapist for your appointment. In order for the expense to be covered, it must be performed by a licensed massage therapist. If you aren’t sure about licensure, ask the therapist.

3. Request a “medical receipt”. Explain to the therapist that you need a receipt for your FSA/HSA. The receipt should contain the information needed to get the expense approved.