Guide to IRS policy to deduct
weight control treatment

In September 1999, nine organizations including American Association of Bariatric Physicians and American Society for Bariatric Surgery petitioned the Internal Revenue Service (IRS) to change its policy to allow a tax deduction for weight loss treatments.

On April 2, 2002, the IRS announced a new policy (IRS Ruling 2002-19) stating that "Obesity is medically accepted to be a disease in its own right." For taxpayers, this means that treatment specifically for obesity can now be claimed as a medical deduction. According to the IRS:

"Uncompensated amounts paid by individuals for participation in a weight-loss program as treatment for a specific disease or diseases (including obesity) diagnosed by a physician are expenses for medical care that are deductible under § 213, subject to the limitations of that section."

This is a big victory.

• It will greatly help individuals who have high expenses related to their obesity, who itemize their deductions, and who are eligible for the medical deduction.
• The ruling applies to individuals who can participate in a flexible savings account because those programs use the same IRS rules. This means that many persons can put aside pre-tax dollars to use for weight management during the year.
• By recognizing obesity as a disease in its own right, the ruling will encourage Medicare, Medicaid and private insurance programs, including managed care, to look at including obesity treatments in their coverages.

Are you entitled to an IRS Tax Deduction?
The ruling applies not only to 2001 income tax returns - which were due April 15 in most of the country - but as far back as 1998. Taxpayers who want to take a deduction for past expenses need only file an amended return for the tax year in question. IRS Publication 502 has the details on the medical deduction.

Who is eligible for the deduction?
There are three categories of persons who may be eligible.

• First, taxpayers who itemize their deductions can add these costs to the costs of medical and dental expenses. Within this category, taxpayers can only deduct medical and dental expenses that exceed 7.5% of their adjusted gross income and that are not reimbursed.
• Second, many employees have medical savings accounts (MSAs) through their employers. MSAs use the same definitions of medical expenses, as do individual taxpayers. Therefore, employees can use their MSAs for weight loss programs if undertaken at a physician’s direction to treat an existing disease.
• Third, many employers provide Flexible Savings Accounts (FSAs) that may provide this coverage. FSAs, also, use the same definitions of medical expenses, as do individual taxpayers.

ˆ Back to top

Is obesity itself a disease?
Yes. Obesity is a listed disease in the International Classification of Diseases (ICD-9-CM). The ICD-9-CM is published by the World Health Organization and is the definitive compilation of diseases; the United States Public Health Service uses it.

According to the IRS, "Obesity is medically accepted to be a disease in its own right. The National Heart, Lung, and Blood Institute, part of the National Institutes of Health, describes obesity as a ’complex, multifactorial chronic disease.’" "Other government and scientific entities have reached similar conclusions. For example, in a preamble to final regulations the Food and Drug Administration states "obesity is a disease." 65 Fed. Reg. 1027, 1028 (Jan. 6, 2000). The World Health Organization states that "[o]besity is now well recognized as a disease in its own right ...." Press Release 46 (June 12, 1997)."

Obesity is not defined in the Revenue Ruling. Medically, obesity is excessive body fat usually measured as 30 pounds or more over ideal body weight or a Body Mass Index of 30 or more.

We recommend consulting your professional tax advisor before submitting a tax return. For more information about tax procedures and other rulings related to obesity, go to the IRS website.

ˆ Back to top

IRS Ruling 2002-19