Letter of Medical Necessity for HSA & FSA: How It Actually Gets You Reimbursed
You have a Letter of Medical Necessity, or you are about to get one. Good. But the letter does not put money back in your pocket by itself. It is the proof that makes an otherwise-personal expense count as medical, so your HSA or FSA can actually cover it. This guide walks through how that reimbursement really works, step by step, and how an HSA and an FSA handle it differently.
First, what the letter actually does
A Letter of Medical Necessity does not pay you. It documents that a licensed physician has tied a specific purchase to a specific diagnosed condition, which is what turns that purchase into a qualified medical expense in the eyes of the IRS and your plan. If you are fuzzy on what an LMN is or whether you qualify, start with our guide to what a Letter of Medical Necessity is. Once you have one, the money still moves through your account's normal reimbursement process. Here is what that looks like.
The reimbursement process, step by step
The core process is the same for both accounts:
- Make sure the expense qualifies. The letter has to connect the item to a diagnosed condition, not to general wellness.
- Pay for it and get an itemized receipt. The receipt needs to show the item, the date, and the amount. A card statement alone usually will not do.
- Submit a claim, or reimburse yourself. This is the step that differs between an HSA and an FSA, covered just below.
- Attach your documentation. That means the itemized receipt plus the Letter of Medical Necessity.
- Get the money, and keep your records. Either the reimbursement lands in your bank account, or a card charge is confirmed as valid.
HSA vs. FSA: the same letter, two different paths
The letter is identical. What changes is who checks it, and when.
| At reimbursement time | HSA | FSA |
|---|---|---|
| Who approves it | You do. You self-certify and keep the records. | Your FSA administrator reviews and approves the claim. |
| When you can be reimbursed | Anytime after you paid, even years later, as long as your HSA existed when the expense happened. | Within the plan year, plus any grace period or run-out window your plan allows. |
| What you submit | Usually nothing up front. You reimburse yourself and keep the letter and receipt on file. | The itemized receipt and the Letter of Medical Necessity, through the claims portal. |
| If it is questioned | The IRS can ask for proof in an audit. Your letter and receipt are that proof. | The administrator can deny the claim or ask for more documentation before paying. |
The reason for the difference is ownership. You own your HSA, so the recordkeeping is on you. Your employer's plan runs your FSA, so it reviews claims before paying. Both sets of rules are laid out in IRS Publication 969.
Paying with the card vs. paying out of pocket
If you have an HSA or FSA debit card, swiping it for an obviously-medical expense like a pharmacy copay usually clears on its own. A gray-area expense like a gym membership is different. The charge often gets flagged for "substantiation," which just means you will be asked to send in the receipt and letter to prove it qualified. To skip that back-and-forth, many people pay out of pocket for gray-area items and then file a claim with the receipt and letter attached, so the documentation travels with the expense from the start.
Need a Letter of Medical Necessity to get reimbursed?
A board-certified physician reviews your health profile and issues a signed letter when it is medically appropriate, ready to submit to your HSA or FSA. $69, and only if you are approved.
See if you qualify →What to actually submit
Two documents do almost all the work:
- An itemized receipt that shows the item, the date, and the amount.
- The Letter of Medical Necessity, which names your diagnosed condition and ties the expense to it.
Keep them together. If an FSA administrator, or for an HSA the IRS, ever asks, this pair is what proves the expense was legitimate.
If your claim is denied
A denial is usually fixable. The most common reasons are a missing itemized receipt, a vague letter that does not name a specific diagnosis, or an expense that genuinely does not qualify. The first two you can fix by resubmitting with a clearer, diagnosis-specific letter or the right receipt, or by using your administrator's appeal process. The third you cannot. If the expense is not tied to a real medical condition, no letter will make it eligible, and you should be wary of any service that claims otherwise.
Keep your paperwork, especially with an HSA
With an FSA, keep copies in case the administrator asks. With an HSA the recordkeeping matters even more, because you self-certify. The IRS says you must keep records sufficient to show that your distributions were used only for qualified medical expenses. If a distribution turns out not to qualify, it is taxable, and if you are under 65 it can carry an additional 20% tax. So hold on to the letter and receipt, and plan to renew the letter about every 12 months if you keep claiming the expense. See IRS Publication 969.
The honest limit
A letter supports your claim. It does not guarantee it. Your FSA administrator, or the IRS rules for an HSA, still decide whether the expense qualifies. And a letter cannot turn a genuinely personal purchase into a medical one. In 2024 the IRS cautioned that a note based on self-reported information does not, on its own, make a wellness expense reimbursable. The expense has to genuinely treat a diagnosed condition. When it does, the letter does its job.
This article is for general information and is not tax, legal, or medical advice. IRS rules and plan policies change and vary by administrator. Confirm the specifics with your HSA or FSA administrator or a tax professional.
Do I send the letter to the IRS or to my HSA/FSA administrator?
How long does reimbursement take?
Can I get reimbursed for something I already paid for?
What documents do I need?
My HSA or FSA card was declined for a gym charge. Why?
Does a letter guarantee I get reimbursed?
Need a Letter of Medical Necessity to get reimbursed?
A board-certified physician reviews your health profile and issues a signed letter when it is medically appropriate, ready to submit to your HSA or FSA. $69, and only if you are approved.
See if you qualify →Dr. Kawalek is a board-certified internal medicine physician with 15+ years of clinical experience. He founded MedSlip to give patients fast, affordable access to the Letters of Medical Necessity that make fitness and wellness spending HSA/FSA-eligible.