Can food and gym costs be covered under a medical flex plan?
Issue:

One of your employees is trying to lose weight to avoid weight-loss surgery. He wants to know whether gym and special food expenses are covered under your medical flex plan. Can these types of expenses be covered?
Answer:    

Some food and gym costs could be covered under your flex plan. IRS Publication 502 specifies that a plan can include the cost of special food in medical expenses if the food alleviates or treats an illness, but it cannot include the cost of diet food or beverages in medical expenses because the diet food and beverages substitute for what is normally consumed to satisfy nutritional needs. You can include the cost of special food in medical expenses only if:

    1. The food does not satisfy normal nutritional needs;

    2. The food alleviates or treats an illness; and

    3. The need for the food is substantiated by a physician.

Amounts an employee pays to lose weight can be included as medical expenses if the payments are for a treatment of a specific disease diagnosed by a physician, such as obesity, hypertension, or heart disease. This includes fees paid for membership in a weight reduction group, as well as fees for attendance at periodic meetings. Membership dues in a gym, health club, or spa as medical expenses cannot be included, but separate fees charged there for weight loss activities can be.

Source: IRS Publication 502, Medical and Dental Expenses.
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