The ‘Family and Retirement Health Investment Act of 2011', introduced in the Senate by Orrin Hatch and the House of Representatives by Erik Paulsen last month, would amend the Internal Revenue Code to include dietary supplements as ‘eligible medical expenses’ in the IRS code.
It is also one of several Bills calling for over-the-counter (OTC) products – which are not now reimbursable under the Patient Protection and Affordable Care Act unless accompanied by a prescription – to be eligible.
Preventive approach saves money in the long-run
NPA chief executive John Gay said it was difficult to predict whether the Bill was likely to succeed, as it was one of several calling for OTC medication to be included in Health Savings Accounts (HSAs).
He added: “I don’t know that the OTC lobby is putting all of its efforts into this Bill as there are several others that have recently been introduced with similar provisions, but we welcome the fact that this Bill is also arguing that supplements should be included in these accounts.”
Other Bills more specifically focused on supplements such as Congressman Earl Blumenauer’s Tax Equity for Meal Replacement and Supplements Act had also raised awareness of the issue, he said.
“NPA supports increased access to supplements as part of our health care system so that it is truly a health care system and not simply a disease treatment system. Letting HSA and FSA (flexible spending account) funds apply to supplements would bring us closer to that goal.
“By establishing tax deductibility for specific products through HSAs and FSAs, the legislation encourages preventative care and promotes public health. That’s not just the smart thing to do. It’s the right thing to do.”
ANH-USA: Opposition from Senate Democrats likely
The Alliance for Natural Health USA added: "We’ve been pleased to see the Bill garner such support in a short time. There was a bill (H.R. 3406) in the previous Congress [Blumenauer’s Bill] that solely attempted to add dietary supplements and meal replacements to the IRS definition of ‘medical care’ and therefore purchases of them could be deducted from individual gross income.
"The Family and Retirement Health Investment Act of 2011 not only allows dietary supplements and meal replacements to be qualified HSA/FSA expenses but expands HSA/FSA contributions amounts, and allowable expenses such as OTC purchases. Because this bill addresses a number of widely held concerns with the healthcare law, there seems to be greater support for it."
As for its chances of success, it would "meet opposition from Senate Democrats due to Sec 124. that repeals deduction limits on employer sponsored health plans", predicted a spokesman. "Compromises seem likely but it’s too early to say what, Congress is in gridlock at the moment."
An FSA allows an employee to set aside some earnings to pay for certain medical expenses. Money deducted from an employee's pay into an FSA is not subject to payroll taxes, resulting in payroll tax savings.