Funding Concierge Medicine Costs with HSAs/FSAs

concierge medicine

By Dave Woodruff
The A.I. Group, Inc.

Most of us have heard of “concierge medicine” and it’s gaining popularity, especially among executives.  As more people enroll, more questions are popping up that we haven’t heard before.  One of the most frequent questions we’ve heard is, “Can I fund the cost of the concierge with my health savings account (HSA) or flexible spending account (FSA)?”

The answer is an absolute “maybe!”

Why, the squishy answer?  It’s because not all medical concierge services operate alike and the portion of the expenses that are qualified aren’t always in a particular model.

Here’s a brief description of the four prevalent models of concierge services and what is qualified for reimbursement:

  1. Fees for Care.  In this model, the participant subscribes to a medical concierge to have access to care.  At the time services are rendered, additional fees are charged that are directly related to the medical care given.  The subscription portion of the fee is not eligible, but generally the amount related to actual care provided would be considered as an eligible medical expense under the HSA guidelines. 
  2. Annual Physical. Here a fee is charged for an annual physical, usually more comprehensive than covered under the Patient Protection and Affordable Care Act (PPACA) requirements, and the model includes no additional non-medical services or “amenities.”  The physical is considered to be medical care and would also generally be considered an eligible medical expense under the HSA guidelines.  If the fee is payable up front, it would only be reimbursable once the physical has actually been performed.
  3. Annual Physical Plus Amenities. Here a fee is charged for an annual physical and with it some additional non-medical services (amenities) are added. The physical is considered to be medical care and would generally be considered an eligible medical expense under the HSA guidelines, assuming the billing outlines the service(s) and their associated cost(s).The amenities (e.g., retainer fess, access fees, or expedited appointment access to a physician, etc.) are not eligible medical expenses under the HSA guidelines even if the bill has a line item for the access or amenities portion. If the medical provider only furnishes a global bill with no itemization for specific services, it may be difficult to substantiate the service was an eligible expense.
  4. Amenities Only. Here the fees are exclusively for access to the medical concierge.  These fees pay for the amenities like retainer fees, access fees, or expedited appointment access. These are not qualified medical expenses and, therefore, are generally not eligible for reimbursement through the participants HSA or FSA.  

A quick rule of thumb is if the bill is directly related to a qualified medical service or expense, it is reimbursable.  If it is only for access to, or the right to “get in the door,” then it is not a qualified medical expense for HSA/FSA reimbursement purposes.  As with everything, there are exceptions and qualifications and only the participant’s qualified tax consultant can properly advise. 

Finally, the participant can reimburse him/herself from his/her HSA or send payment to the medical concierge directly from his/her HSA regardless of the qualification of the expense.  If the expense is non-qualified, they simply have to declare non-qualified disbursals on their Federal Income Tax and pay both the appropriate ordinary income tax as well as the excise penalty of 20% of the disbursement.