HSA Legislation Would Authorize Spending on Dietary Supplements

WASHINGTONAmericans with health savings accounts (HSAs) and Health Flexible Spending Accounts (FSAs) would be eligible to spend money on dietary supplements without a doctor's prescription under bills that have been reintroduced in the House and Senate.

The legislation would expand the term "medical care" in a section of the Internal Revenue Code to "include amounts paid to purchase herbs, vitamins, minerals, homeopathic remedies, meal replacement products, and other dietary and nutritional supplements." Individuals covered under the health plans could spend up to $1,000 each taxable year on the products above.

Sens. Orrin Hatch (R-UT) and Marco Rubio (R-FL) and Rep. Erik Paulsen (R-MN) introduced the legislation in order to simplify and improve HSAs and FSAs. The bills would make a number of changes such as allowing Medicare enrollees to contribute their own funds to their Medicare Medical Savings Accounts, permitting spouses to make catch-up contributions to the same HSA account, and removing restrictions that bar Native Americans from contributing to their HSAs if they have used the medical services of a tribal organization or the Indian Health Service. 

The legislation is important to dietary supplement companies because the Internal Revenue Code has been interpreted as preventing customers from using their health savings accounts to purchase supplements without a doctor's prescription, said Mike Greene, vice president of government relations with the Council for Responsible Nutrition (CRN), the Washington, D.C.-based trade organization representing dietary supplement manufacturers and ingredient suppliers. CRN plans to advocate for the legislation next Wednesday when it meets with lawmakers on Capitol Hill.

A "consumer can't choose to purchase vitamin D and calcium and deduct it from their flexible spending account," Greene said in a phone interview. "If you have a doctor's prescription, you can deduct it from an FSA."

John Shaw, executive director and CEO of the Natural Products Association in Washington, D.C., said the legislation would promote health and wellness in the United States, giving Americans more opportunities to take supplements as part of their personal healthcare plan.

"All we know if this is an important piece of legislation that needs to pass," Shaw told INSIDER. "This is in line with the congressional agenda, which is to create better healthcare access to each individual American."

The legislation was introduced at least one other time: two years ago in the 112th Congress. Greene, who previously worked as communications director for Rep. John Dingell (D-MI), isn't confident Congress will pass the legislation this year. However, he suspects "it will move further than the prior Congress" giving it momentum for potential passage in the coming years.