Action Alert: New Legislation Would Expand HSA and FSA Coverage of Dietary Supplements


hsa_piggybankA new bill would expand “eligible medical expenses” in the IRS code to include herbs, vitamins, minerals, homeopathic remedies, meal replacement products, and other dietary and nutritional supplements. A new Action Alert.

Sen. Orrin Hatch (R-UT) has introduced S.1098, the Retirement Health Investment Act of 2011. The House version of the bill, HR.2010, was introduced by Rep. Erik Paulsen (R-MN) and is already enjoying wide support with thirty cosponsors.

Last month we told you about two health savings programs that help pay for complementary and alternative medical (CAM) treatments not covered by regular insurance: Flexible Spending Arrangements (FSAs) and Health Savings Accounts (HSAs). “Eligible medical expenses” determine what can be covered by both HSAs and FSAs. Under current law the above are not considered “eligible medical expenses” and so HSAs cannot be used to cover them.

The bill as it stands is strong, and we support it—though hope to see the language tweaked to address that part of the healthcare reform act that threatens the very existence of HSAs. We met with Sen. Hatch’s staff earlier today to discuss the bill, and we were assured that the Senator understands the importance of maintaining access to healthcare plans used in conjunction with HSAs.  We will continue to work with Senator Hatch as the bill gains momentum.

You may recall that HSAs are savings accounts owned by the individual, and the funds contributed to them are not subject to federal income tax at the time of deposit. If the funds are not spent, they roll over and accumulate year to year. The law that created HSAs made eligibility dependent on whether one is covered under a high-deductible insurance plan. But section 1302 (e)2(A) of the healthcare reform act limits high-deductible or catastrophic healthcare insurance plans to persons under the age of 30.

This means that beginning in 2014, people over the age of 30 will not be able to purchase an HSA because they will not be eligible for catastrophic plans—making any changes to HSAs irrelevant to them.

Catastrophic plans are designed to give protection against emergencies. They have low monthly premiums in exchange for a higher deductible, making routine doctors visits, etc., more expensive. CAM patients use high-deductible plans to cover emergency services, and use HSAs for purchasing treatments not covered by traditional healthcare insurance. Without the preservation of both high-deductible healthcare plans and HSAs, CAM users will be forced to purchase expensive healthcare insurance with coverage they don’t want or use, while still having to spend money on alternative treatments not covered by insurance.

Therefore we fully support expanding HSAs and FSAs coverage to include supplements among the “eligible medical expenses.” However, the healthcare reform act needs to be amended to allow for catastrophic plans for people over 30 years of age.

Action Alert! Please contact your senators and representative immediately. Voice your support of S.1098 and HR.2010, and explain that coverage of herbs, vitamins, etc., is essential under HSAs and FSAs. Ask Congress to (a) co-sponsor the bills, and (b) include an amendment to the bills to repeal the portion of the healthcare reform act that limits eligibility for high-deductible and catastrophic insurance plans.


Click THIS LINK to go to the Action Alert page. Once there, fill out the form with your name and address, etc., and customize your letter. We have a suggested message for you, but please feel free to add your own comments to the letter.

We’d also love to hear your comments about this article—just add your thoughts below—but remember that the messages below are only seen by our ANH-USA readers and not Congress.

  • Dr Ed Feraco

    About time!

    • Larena

      It should be obvious that to include supplements . . . and coverage to people over 30 would not be increase what we a a nation and what our government pays out. For those who haven’t tried natural medicine — supplements . . . this would provide for naturalists to use our tax money for nutrients RATHER than for cupboards full of pharmaceuticals from laboratories. For people who choose not to know the benefits, personally, of nutrients, vitamins . . . , they’re entitled to remain in narowness and ignorance. I would appreciate, however, that those of you in this category be honest and see what is right before your eyes ~ that those of us who choose to use supplements and nutrients ARE PAYING TAXES for benefits you get, and we have just as much right to decide how our government pays OUR tax money (OUR meaning the money of ALL citizens), as opposed to ONLY YOUR tax money. It’s easy to see who the republicans are — they take our money and then take the attitude that they’re having to carry us, financially, who are not republicans, but do pay a high percentage of their income through taxation. Why is it that republicans choose to think they should be the only ones with exemptions?

  • So, legislators, Senators and Congresspeople, you are now owned by the health supplelments industry.

    You are cutting budgets everywhere else, but due to the wonderful lobbying and campaign contributions from the health supplements industry, you increase health care spending for these speicalized products.

    They are not necessary and are not really helpful for the health of the people of our country.

    Squeeze worthwhile benefits for people and spend on profits for your friends.

    • John Harris

      First with this bill congress is not increasing spending for these, but they are essentially cutting the income tax on the income you spend on such supplements if you use your HSA to buy them. You might claim these are equivalent but they are not. Whether people spend more on such supplements as a result remains to be seen. But second, who made you all knowing to so blithely claim none of these supplements are necessary and that they are not helpful for health? There is a ton of solid research proving, for instance, the benefits of vitamin D supplements, especially to people in northern latitudes in winter – but you just ignore whatever scientific evidence you like to dismiss all supplements. Some people may medically need a meal replacement product – but of course to you there is no benefit. I suggest you read the mountains of evidence supporting health benefits of a host of herbs and supplements and foods before so blindly spouting such an ignorant or perhaps brainwashed remark

    • rsp

      To bad you don’t understand the importance health supplements are for thousands of people. It is better to be proactive with your health. I have used health supplements for my M.S. for over 22 years and most people wouldn’t even know about this health issue. I know of may people who are not able to walk or communicate or have a norman life, or who have died from their M.S. and have only use drug to try to combate their health issue with M.S. I’m in better health then someone who has us drugs to mask the M.S. So what your saying is we should continue to do is give BIG DRUG CO. more money just to come up with what??? A nother drug that doesn’t do anything, but give you more side effects. I want to put my money where it will be the best for my health not for big business and big government.

    • Michael Christacopulos

      Of course your are against them. Why don’t you start reading all information about supplements. You will realize your education is mostly obsolete and dangerous.

      I will bet you I can give at least one supplement to replace the big pharma kool aid for any disease or ailment., that actually heals.

      Wake up Doc – your life expectancy is below the national average.

      If you take the first bet I’ll give you even odds that you are overweight.

    • Cindy A

      Fred…who are you to say supplements “aren’t really helpful for the health of the people of our country”. I take supplements that CHANGE MY LAB VALUES.

    • Guy

      Wow, that’s some double standard, Fred.
      1) It’s fine for the gov’t to spend billions of taxpayer’s dollars to pay for pharmaceutical drugs, but
      2) it’s wrong for the gov’t to allow a taxpayer to spent his own pre-tax dollars for dietary supplements.

  • John Davis

    This is a question rather than a comment. Would this bill make supplements tax deductible?

    • You would not be able to deduct the purchase on your tax return, but you would be able to purchase them with special pre-tax dollars. When you receive your paycheck, some of the money (an amount you choose) can be placed into a special type of account (HSA or FSA) with restrictions on how it can be spent. You will only pay income taxes on the amount of your paycheck that’s left over after that money is directed to your HSA or FSA. For example, if you make $35,000 a year but direct $2,000 a year into an HSA, you would only pay income taxes on the first $33,000 of your income. Currently HSA/FSA money cannot be used to purchase supplements. This bill would allow supplements to be purchased with HSA/FSA money.

      • Guy

        Retired people (actually anyone who pays any income tax) should be allowed to have a HSA or FSA – not just the employed.

  • Greg

    I strongly support S.1098 and HR.2010 that cover herbs, vitamins, etc., in HSAs and FSAs. It is time for the US government to support healthy lifestyles rather than unhealthy ones. This approach will save the government and ultimately the taxpayers billions of dollars in health care costs.

    When my 97 year old mother was in a nursing home recovering from a broken hip, she had been self-supporting in her own home until then, I saw a severely obese bedridden man in his thirties. He had three quarts of Pepsi at his bed side. He should have been in the prime of his life and yet he was virtually helpless and very likely supported on the public’s expense.

    Rewarding people for taking vitamins is a good idea. I may help them buying very expensive drugs to mask problems at the public’s expense.

  • Barbara Viken

    The state has given me a draconic cut in my disabilitly income. I definitely need help to get my essential supplements. I can’t take drugs and I rely on supplements to keep all the pain from my injuries in check.

  • Rick Gordon

    You can put lip stick on a pig but it’s still a pig. Leave Medicare as is! No I will not pass this on to face book. RHIA sucks and you should be ashamed of your selves for trying to hood wink us.

    • Hi Rick, please note this bill is unrelated to Medicare. It simply expands the HSA/FSA accounts (which use your own, not government, dollars) that already exist so that in addition to covering drugs and surgery, they can now also be used to pay for supplements and gym memberships.

  • David

    I can’t connect to your action alert page. This happens quite often, as if DOS attacks are going on.

  • Linda Carmicle, Ph.D.

    I hope we can get a break for supplements. I am a 73 year old health nut in excellent health because i exercise, take supplements, and eat healthy foods. My prescription drug bill is almost nonexistent, and I see my medical doctor once a year for a physical that is only partly covered by Medicare. But I have to pay an exorbitant insurance bill to make sure i have prescription coverage if I every need it.

    I am thankful for my good health and I know my use of supplements has saved me lots of money on doctors and medicines. Naturally, I feel I deserve a break on taxes and insurance. The one perk I get is that my supplemental insurance pays for my gym membership. I certainly appreciate and use my gym faithfully.

    Linda Carmicle, Ph.D.

  • richard emery

    wouldn’t it just be better to have all these things covered under standard health insurance. oh yeh! the AMA and big pharma won’t allow it!

  • Dawn Langley-Brady RN, MSN, CHPN

    I am an aromatherapy nurse and am concerned with anything limiting acess to CAMs.

  • Dennis Hoppe

    I would like to thank Senator Hatch for introducing S.1098. It is just another step in the right direction to prove that patented drugs arn’t the only disease treatment solutions.

  • I am now 65 yrs. just got my medicare. and havea low income qualifying rate on insurance.
    Now I am cinfused. I am not a medication person. Have been alternative for a longtime. I want to get herbs and natural suppliments. Now that I have a serious problem. I need to take a regular medication. And I need to stay in the range on some herbs that can take cre of the problem. But it is not in the range to cover the use of it. And I have HMO. It pays lots of coverage on my coverage.
    For low primium. Only not the other half. I need to get covered on Herbs and treatments too.
    Neeed help on this. My provider had a sign in the room. and said it will have a new policy of complying with the FDA. I don’t know if it is everything that is all chemical or it can be with and altinating kind of drug handling. Mind is not to so manyhtings and my have side effects. so far I am following the instructions. fell a little bit better, but it wares off by the end of the week. Not as good as I want it. My bones are to stop the diteriation and growth I don’t know. I had some problem after surgery. And taken theherbs and it helped me .It was purchased by the out off pocket. When not ready with Medicare yet. Stopped because it was not in the range of Budget. Nnow I suffer in the body form. Which was not known until now. I would have continued if I known of it. And I would not have this problem. I need to know if is going to pass to help people like me.

  • John Harris

    While I strongly support covering supplements under HSA’s and the like, I have to wonder about removing the limitation of high deductible insurance to those under 30. Seems like the conflict should be resolved by allowing HSA’a for people with full or low deductible insurance. The new healthcare reform act only works when everyone has good insurance coverage. Those over 30 especially need full coverage, so the solution is not to allow them catestrophic insurance (where hospital ER’s have to treat them regardless of their lack of full insurance – the huge problem we have had in the past and still do till the new act fully takes effect) but instead to allow them to have an HSA and full insurance. Yeah it costs them on both ends, both for full medical insurance and for HSA expenses for complimentary care, but at least their supplements will be with pretax dollars. Even better of course would have full insurance cover all health care, including proven supplements and proven alternative care.

  • Kelli

    This could be a good or a bad thing. It will give beaucrats more control over CAM therapies, which they could use to restrict or outlaw them. Really I wish they would leave them out of the Healthcare Reform law. Let people decide their own healthcare. I would probably still stay away from a conventionally-trained doctor even if they were handing out supplements.
    For every dangerous Big Pharma drug there is a safer, affective alternative remedy.

  • Mick

    I would be for the passage of such things if it weren’t for my age-ingrained cynicism. In only my reading this article (i.e. I have not read the bills), this appears a devil’s bargain. First, this lumps homeopathic solutions with big pharma solutions through classifying supplements as “eligible medical expenses”. Big pharma and agra would love nothing more than for the natural supplement industry to be regulated by the FDA as medicine. The Codex Alimentarius all but demands it for full its implementation. So the next step is they are regulated like big pharma solutions. Maybe the excuse will be “Well, we certainly can’t give a tax break/government subsidy for supplements that might be absolute crap, as many are, so there must be some standard for them to qualify for this”….and you can see where it would go from there. Think this is a stretch? More evil has come from humbler beginnings in this country. I say keep government out of this area altogether. Don’t let the camel stick its head further into the tent. Of course, if you think the FDA and big pharma always have your best interests in mind AND can make decisions regarding your natural supplement intake better than you can, then there is probably not a problem for you with this. I want to be wrong about this.

  • It would be nice if they also would cover orthopedic pillows, ice packs, and custom orthotics, because these have benefitial health effects as well and our more proven then many supplements.