Advance Efforts to Include Dietary Supplements in FSAs and HSAs

Focus on proactive self-care, the pandemic, the ensuing recession, and renewed attention to healthcare access have all combined to create renewed opportunities to advance legislation/Administration support to include reimbursement for dietary supplements in Flexible Spending Accounts/Healthcare Savings Accounts (FSAs/HSAs). CRN commits to drive this conversation and advance this policy directive.

BUILDING ON OUR PREVIOUS EFFORTS

IRS should allow HSA/FSA reimbursement for supplement purchases to encourage healthy lifestyles and free up household resources

CRN is calling on the Internal Revenue Service (IRS) to revise key tax guidance that would permit nutritional/dietary supplements to be considered “medical expenses” and allow Americans to be reimbursed from their HSAs and FSAs for out-of-pocket dietary supplement purchases. The coalition letter notes that allowing this would "not only encourage Americans to maintain healthy lifestyles and recognize the valuable role that nutritional supplements play in attaining better health, especially in these critical, unprecedented times, it would also free up scarce household resources for other critical needs."

Straightforward messaging on which segments of taxpayers would be affected is key. As Steve Mister said in coverage from NutraIngredients-USA, “We have been careful to not talk about these HSA/FSA changes as if they are going to get rid of food deserts and address malnutrition among the very poor. This is really about the middle class." WholeFoods Magazine also covered the letter, noting the associations' argument that dietary supplements already fall under the definition of “medical care”—DSHEA allows dietary supplement manufacturers to lawfully make structure/function claims and the 1990 Nutrition Labeling and Education Act allows supplements to carry health claims regarding reduced risk of disease, satisfying the medical care definition. Contact Julia Gustafson with questions.


Tax-Free Health Accounts Encourage Consumers to Make Cost-Effective Decisions for Their Healthcare

  • Tax-Free Health Accounts like Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) provide consumers with incentives to make smarter decisions and to take greater control over their healthcare. With the rising costs of healthcare, consumers should be encouraged to use products and services that are cost-effective and that focus on prevention and wellness. Tax policies should incentivize the use of dietary supplements containing such beneficial nutrients as calcium, vitamin D, omega-3 fatty acids, a multivitamin with folic acid and more.

Dietary Supplements Provide Health Benefits to Millions of Americans

  • More than 180 million Americans use dietary supplements each year. Dietary supplements are a cost-effective way for consumers to take an active role in managing their healthcare. Combined with other healthful practices, dietary supplements are a component of smart lifestyle choices, playing a key role in preventative healthcare and overall good health.
  • A growing body of scientific research demonstrates the health benefits of dietary supplements. The Food and Drug Administration (FDA), one of the government agencies that regulates the dietary supplement industry, has approved specific health claims, based on the scientific literature, for a number of dietary supplements.
  • Recent economic research demonstrates that using dietary supplements saves billions of dollars annually by reducing health conditions that lead to emergency room visits, in-patient hospital stays and long-term care. Incentivizing supplement usage will save the healthcare system money.
  • Research shows that consumers who take dietary supplements also are more likely to engage in other health-promoting activities such as eating a well-balanced diet, exercising regularly, visiting the doctor, and getting enough sleep.

Dietary Supplements Should Be Considered Allowable, Deductible Expenses for HSAs and FSAs

  • The Internal Revenue Code defines “medical care” (Section 213d) as expenses “for the diagnosis, cure, mitigation, treatment, or prevention of disease or for the purpose of affecting any structure or function of the body.” Dietary supplements fit into this definition and therefore should be recognized as medical expenses in the tax code associated with HSAs and FSAs.
  • Consumers benefit when the government recognizes the substantial health benefits of dietary supplements products. Expanding the coverage of HSAs and FSAs to include those products will provide economic incentives for consumers to practice preventative healthcare.