Can You Use an HSA to Pay for an Electric Bike?

The short answer is no. In most cases, you cannot use a health savings account (HSA) to purchase an electric bike or really any sports or recreational equipment. But there is a longer answer which could end in “yes.”

“Americans can use their health savings account to purchase exercise equipment, like a bicycle, if they have a diagnosed medical condition and receive a Letter of Medical Necessity from their doctor,” said Shobin Uralil, founder and COO of Lively, a customer-centric HSA provider.

“Exercise equipment is not eligible for HSA reimbursement simply for general health, well-being, or weight loss,” Uralil continued. “Several examples of medical conditions that a doctor may prescribe exercise equipment for include obesity, diabetes, high blood pressure, and more.”

So, yes, in some circumstances, your doctor can essentially “prescribe” something like an electric bike, paving the way for you to use HSA funds.

What is an HSA?

An HSA is a special kind of savings account. It lets you save money for qualified medical expenses like doctors' visits or prescriptions using pre-tax or tax-deductible funds. Thus, contributions to an HSA reduce your taxable income.

An HSA may also earn interest tax-free. And the funds in your HSA are not taxed when you use them. Balances remaining in an HSA at the end of the year, roll over to the next year.

There are some eligibility requirements for an HSA, so visit HealthCare.gov or IRS Publication 969 if you want to know if you are eligible for an HSA.

What is a Letter of Medical Necessity?

To use funds from your HSA to pay for an electric bike or really any similar exercise equipment, you will need to have been diagnosed with a medical condition. Once diagnosed your physician can provide you with a letter of medical necessity.

A letter of medical necessity is a statement from your doctor saying you have a specific diagnosis and purchasing a particular medicine, a medical device, or even an electric bike will help in the treatment of your condition and, therefore, may be purchased with funds from an HSA.

Ask Your Doctor

If you have been diagnosed with type-2 diabetes, obesity, high blood pressure or even mood disorders, ask your doctor if riding an electric bike regularly would help.

You can even point your physician to “The Complete Electric Bike Buyer’s Guide,” to help him or her understand how electric bikes work.