Senate bill would allow flexible spending plan funds to be used for supplement purchasesSenate bill would allow flexible spending plan funds to be used for supplement purchases
Another legislative attempt is being made to allow funds from tax advantaged health plans to be used to buy supplements.
November 3, 2023
A bill to make dietary supplements eligible for purchase with tax-advantaged funds has been reintroduced in the U.S. Senate. It joins a similar bill currently before the House.
The bill, put forward by Sen. Kevin Cramer, R-South Dakota, would amend the Internal Revenue Code to allow funds from health savings accounts (HSAs), flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) to be used for the purchase of dietary supplements.
All three of the programs are ways for consumers to set aside pre-tax dollars to pay for health care costs, including out-of-pocket costs for medicines, medical devices and doctor visits.
Support from industry
The legislation amends the Internal Revenue Code to designate certain over-the-counter dietary supplement products and foods for special dietary uses as qualified medical expenses. It is endorsed by the Natural Products Association (NPA), Swanson Health Products and the Healthcare Nutrition Council.
Making this change to the IRS code has been a priority for Cramer. He has introduced the bill before, including in 2021.
“Nutritional supplements are preventative care, helping lower health care costs by keeping Americans healthy,” the senator said. “By modernizing the rules for savings and spending accounts, my bill would save taxpayer funds, increase consumer choice, and encourage people to invest in their health and wellness.”
NPA President and CEO Daniel FAbricant, Ph.D., issued a statement supporting the bill.
“Expanding access to nutritional supplements is an innovative solution aimed at keeping more Americans healthy,” Fabricant said. “For years, Senator Cramer has been a natural product industry champion.”
Consensus building around idea
Cramer’s reintroduced bill is similar to other efforts to make this change. Earlier this year, an analogous bill was introduced in the U.S. House by Reps. Darin LaHood (R-Ill.), Brendan Boyle (D-Pa.), John Curtis (R-Utah) and Josh Gottheimer (D-N.J.).
The sponsors of that bill said this change not only makes sense from a health care policy perspective, but also seems to align with what most Americans already want.
The House bill sponsors pointed to a joint Council for Responsible Nutrition (CRN)/Consumer Healthcare Products Association (CHPA) study that found 78% of Americans who have FSA or HSA accounts would like to have the flexibility to use those funds to purchase supplements.
CHPA notes on its website that HSA plans are used by Americans from every income level, with the average HSA contribution being 2% of household income, according to findings from the Employee Benefits Research Institute (EBRI). In fact, 48% of those using HSA/FSA accounts make less than $71,243 per year and the highest percentage of users of HSA/FSA accounts come from those making between $50,000 and $59,999 annually.
While past bills have been unsuccessful, CHPA CEO Scott Melville noted in 2021 that the pandemic has raised Americans’ awareness of the importance of dietary supplements to support health. So repeated reintroductions of the idea could be a winning strategy in the end.
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