Legislation introduced to allow dietary supplements be covered under Flex/Health spending accounts

By Danielle Masterson

- Last updated on GMT

Getty Images / Hill Street Studios
Getty Images / Hill Street Studios

Related tags Flexible spending account HSA Dietary supplement industry

Trade associations have long advocated for dietary supplements to be added to the list of qualified medical expenses to allow consumers to decide how to spend their pre-tax dollars.

On Thursday bipartisan legislation was introduced in the House of Representatives that would provide tax incentives to millions of Americans and effectively lower their cost of purchasing dietary supplements.

U.S. Representatives Darin LaHood (R-Ill.), Brendan Boyle (D-Pa.), John Curtis (R-Utah) and Josh Gottheimer (D-NJ) introduced the Dietary Supplements Access Act​, which they say will promote Americans' ability to make personal healthcare decisions, support healthy lifestyles by modernizing the availability and coverage of vitamins and minerals, and recognize the valuable role nutritional supplements play in helping to achieve better health outcomes and promote cost savings.

This legislation comes after five trade associations worked together to build a case to show that the Dietary Supplements Access Act encourages good health and is a cost saver. The Consumer Healthcare Products Association (CHPA), American Herbal Products Association (AHPA), Council for Responsible Nutrition (CRN), Natural Products Association (NPA), and the United Natural Products Alliance (UNPA) applaud the Act that they have long advocated for.

A joint CRN/CHPA study found nearly 80% of Americans who have FSA or HSA accounts would like to have the flexibility to use those funds to purchase dietary supplements.

Current interpretation

Over 35 million Americans have over $100 billion in tax preferred health savings accounts or HSAs. Americans also have over 21 million flexible spending accounts or FSAs through their employers. Under current law, FSAs and HSAs allow employees to put aside money before it has been taxed to pay for healthcare costs related to medical care, including certain prescription drugs, dental and vision care, OTCs, feminine products, and other health-related items.

While these accounts were established to help make healthcare more affordable, the IRS does not recognize dietary supplements as eligible expenses to be paid for through these accounts. The bill introduced Thursday would end this interpretation and allow Americans to use their HSA and FSA funds to help pay for the dietary supplements.

Making nutrition more accessible 

“As enrollment in HSA’s continues to grow, our bill would remove unnecessary barriers to better meet the needs of consumers. This bipartisan approach would allow over-the-counter nutrition and dietary supplements to be considered as qualified medical expenses under HSAs and FSAs so that a patient can choose to utilize their health savings dollars to access these dietary supplements,” said Rep. LaHood.

"Given this substantial demand, action should be taken to better meet consumer needs. Since HSAs, FSAs, and HRAs, require a prescription for the reimbursement of vitamins it makes sense to remove barriers to supplementing nutrient-deficient diets. This legislation will serve to remove many impediments to self-care, with the goal of creating a sensible path toward better health for all,” said Rep Boyle.

“This bill also sends a clear message to consumers that Congress is serious about giving more Americans choice in how they take care of their health care needs, as well as the importance of proactive care. What works for one person may not work for another, and too often one-size-fits-all policymaking leads to higher costs for consumers and their families,” said Rep. Curtis.

“I’m proud to help lead the bipartisan Dietary Supplements Access Act to make over-the-counter dietary supplements more affordable. We need to do everything we can to boost access to nutritional supplements,” said Rep. Gottheimer.

The US reps along with the five trade associations are now mounting a major consumer campaign to urge Congress to pass this legislation.

“Taxpayers deserve the choice to control their own spending, and this long overdue bill will provide greater incentives for adopting and maintaining healthy lifestyles,” said UNPA President Loren Israelsen. “UNPA will be working hard for its passage.”

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