Does HRA Cover Gym Membership? Medical Necessity, Claims, and Denials

A Health Reimbursement Arrangement generally does not cover a gym membership. The IRS treats health club dues as a “general health” cost rather than a medical expense, so they sit outside what an HRA can reimburse tax-free. The one opening: if a physician diagnoses a specific medical condition and prescribes gym-based exercise as treatment, the membership can qualify, provided the paperwork backs it up.¹

Why Gym Dues Usually Don’t Qualify

HRAs can only reimburse “qualified medical expenses” as defined in Section 213(d) of the Internal Revenue Code. That definition covers costs for the “diagnosis, cure, mitigation, treatment, or prevention of disease” or for “affecting any structure or function of the body.” Expenses that are “merely beneficial to general health” do not count.¹

IRS Publication 502, the agency’s guide to medical and dental expenses, lists “Health Club Dues” in the section titled “What Expenses Aren’t Includible.”² There is no carve-out for a membership an employee personally finds helpful, or one a doctor recommends in general terms for better fitness. Swimming lessons and dance classes are also excluded, even when a physician suggests them, because the IRS classifies them as general health improvements rather than targeted treatment.¹

The Medical Necessity Exception

A gym membership can be reimbursed through an HRA in a narrow set of circumstances. Under IRS guidance, the membership has to be purchased for the sole purpose of either affecting a structure or function of the body, such as a prescribed physical therapy program after an injury, or treating a specific disease diagnosed by a physician, such as obesity, hypertension, or heart disease.¹

“Sole purpose” is the load-bearing phrase. Joining a gym partly on a doctor’s advice for blood pressure and partly because you enjoy the classes doesn’t clear the bar. The IRS has also warned that a doctor’s note based on self-reported health information isn’t enough to convert a general wellness expense into a qualified medical one. The paperwork has to link a diagnosed condition to the gym membership as the treatment for that condition.³

The cost also has to be reasonable. Lavish amenities or premium club features are not considered medically necessary.

Getting a Letter of Medical Necessity and Submitting a Claim

If you do have a qualifying condition, the process is detail-heavy but not complicated:

Start with your plan administrator or plan documents to confirm your employer’s HRA even allows gym reimbursements with medical necessity. Employers can make their plan narrower than the IRS list.⁴
Talk with your doctor about whether a gym-based exercise program is medically appropriate for your diagnosis, and ask for a formal letter if it is.
Make sure the Letter of Medical Necessity is on clinic letterhead, names your diagnosis (ideally with the ICD-10 code), specifies the type, frequency, and duration of the prescribed exercise, and explains why the gym setting is needed. It has to be signed and dated. A statement that you would not have joined the gym “but for” the condition strengthens the file.⁵⁶
Keep itemized gym statements showing the date, service, and amount. A credit card statement on its own usually isn’t enough.⁷
Submit claims after each month of service. IRS rules bar reimbursement for services not yet received, so if you paid several months upfront, you’ll likely file monthly as each period ends.⁷

Conditions that frequently support a successful request include obesity, hypertension, heart disease, diabetes, and recovery from injury or surgery requiring physical therapy.⁵ A vague letter saying exercise “will improve health” won’t do it. The letter has to tie a specific diagnosis to a specific gym-based intervention.

Does the Type of HRA Change the Answer?

No. The Qualified Small Employer HRA (QSEHRA), Individual Coverage HRA (ICHRA), Group Coverage HRA (GCHRA), and Excepted Benefit HRA (EBHRA) all operate under the same Section 213(d) definition of medical expenses. Gym dues are excluded across every HRA type unless the medical necessity exception applies.⁸

Employer discretion runs in one direction. A company can shrink the list of eligible expenses under its plan, but it cannot expand it beyond what the IRS allows. Making gym memberships a covered HRA benefit by employer choice alone isn’t an option if the memberships don’t meet the medical expense definition.⁶

If Your Claim Is Denied

You have appeal rights. HRAs are governed by the Employee Retirement Income Security Act (ERISA), which requires the plan to give a written explanation of the denial and its legal basis, and to give you at least 180 days to file an appeal. The appeal must be reviewed by someone who wasn’t involved in the original decision and who isn’t a subordinate of that person. If the appeal is also denied, the plan owes another written explanation, and you keep the right to sue under ERISA.⁹

The Tax Risk of Getting It Wrong

The IRS has been active on improper wellness reimbursements. In 2023, Chief Counsel Advice 202323006 addressed an arrangement paying employees a monthly “preventive care reimbursement” for wellness activities including gym memberships. Because the activities didn’t meet the Section 213(d) test, the IRS ruled the payments were taxable wages subject to income and payroll tax.¹⁰

The fallout can reach both sides. Employers may need to correct prior W-2s and payroll tax returns, and employees may need to amend personal returns. The standard statute of limitations is three years, extending to six years if the IRS finds a substantial understatement.¹⁰

For comparison, when an employer reimburses a gym membership outside an HRA (through a general wellness perk), and the expense doesn’t qualify under Section 213(d), the reimbursement is treated as ordinary taxable income to the employee, subject to withholding and payroll taxes. A qualifying membership reimbursed through an HRA is a nontaxable benefit.¹¹

Alternatives if Your Gym Won’t Qualify

If your gym membership doesn’t fit inside the medical necessity exception, an HRA isn’t the vehicle. A Lifestyle Spending Account (LSA) is one option some employers offer. It’s an employer-funded, post-tax account that can be used for a wider set of wellness costs, including gym memberships, fitness classes, personal trainers, home exercise equipment, and wellness apps.¹² The trade-off is that LSA reimbursements are taxable income to the employee and show up on the paycheck as gross pay.¹³

Legislation has been proposed that would change what pre-tax accounts can pay for. The Personal Health Investment Today (PHIT) Act, reintroduced in March 2025, would let people use pre-tax HSA and FSA funds for qualified fitness expenses including gym memberships.¹⁴ Two things to note if you’re watching this: as of early 2026 it has not been enacted, and its provisions target HSAs and FSAs rather than HRAs, so even passage may leave HRA rules for gym memberships unchanged.¹⁵

1
IRS. Frequently Asked Questions About Medical Expenses Related to Nutrition, Wellness, and General Health
2
IRS. Publication 502, Medical and Dental Expenses
3
Total Control Health Plans. HRA Gym Cost Reimbursement? Not So Fast, Says IRS
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Cigna. Eligible Expenses
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GoodRx. Can You Use HSA for Gym Memberships
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EBC Flex. Wellness Expenses
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FSAFEDS. Gym Membership Reimbursement FAQ
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Thatch. HRA Eligible Expenses Guide
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Sound Admin. FSA/HRA Claim Denied – What Now
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BDO. IRS Cautions Employers Again on Wellness Plans Purporting to Avoid Payroll Taxes Absent Medical Expenses
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Newfront. Taxation of Gym Reimbursement Arrangements
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ADP. How Lifestyle Spending Accounts Help Move the Needle on Talent Retention
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Take Command Health. Lifestyle Spending Account
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Office of Senator John Thune. Thune, Murphy, Kelly, Panetta Reintroduce Bill to Incentivize Healthy Living and Physical Activity
15
ACSM. Policy Corner, May 2025