There are essentially four “Concierge” models:
- Fees for care. In this model the fees charged are directly related to medical care, as described by the IRS, and would generally be considered as eligible medical expenses under the HSA guidelines.
- Annual Physical. Here a fee is charged for an annual physical, usually comprehensive in scope, that includes no additional non-medical services. The physical is considered to be medical care and would generally be considered as eligible medical expenses under the HSA guidelines.
- Annual physical plus amenities. Here a fee is charged for an annual physical and some additional non-medical services (amenities). The physical is considered to be medical care and would generally be considered as eligible medical expenses under the HSA guidelines. The amenities (e.g. retainer fess or timely access to a physician) are not eligible medical expenses under the HSA Guidelines. If the Physician group provides itemized billing for the services included, the physical can be reimbursed from the HSA as a medical expense, but the “amenities” cannot. In the case where the physician group furnishes only a global bill with no itemization for specific services, it may be difficult to prove the expense was eligible.
- Amenities Only. Here the fees collected by the physician groups are exclusively for amenities like retainer fees or guaranteed timely access. These are not medical expenses and as such are not generally reimbursable by the HSA.
The rationale is detailed below.
The final decision as to whether an expenditure is primarily for medical care, or is merely beneficial to general health, is a question of fact ( i.e. would be supported by evidence unique to the situation in question). If you have questions about your situation after reviewing this answer, you should consult your tax advisor or tax attorney.
Section 213(a) Of the IRS code allows a deduction for uncompensated expenses for medical care of an individual, the individual’s spouse or a dependent, to the extent the expenses exceed 7.5 percent of adjusted gross income. Section 213(d)(1) provides, in part, that medical care means amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. This is the basis for all HSA eligible medical expenses.
Under § 1.213-1(e)(1)(ii) of the Income Tax Regulations, the deduction for medical care expenses will be confined strictly to expenses incurred primarily for the prevention or alleviation of a physical or mental defect or illness. An expense that is merely beneficial to the general health of an individual is not an expense for medical care. Whether an expenditure is primarily for medical care or is merely beneficial to general health is a question of fact.
This is echoed in IRS Publication 502:
“Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. They also include dental expenses. Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. They do not include expenses that are merely beneficial to general health, such as vitamins or a vacation.”
Pub 969 (which speaks directly to additional HSA allowable expenses) again references 502 and makes no mention of physician concierge services:
“Qualified medical expenses. Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. These are explained in Publication 502, Medical and Dental Expenses. ” Publication 969 goes on to include over the counter medications and certain insurance premiums but is silent on the issue of concierge services, considering them to have been addressed in Publication 502.