Bill allows HSA, FSA to include supplements

A 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.

S.1098, the Retirement Health Investment Act of 2011. The House version of the bill is HR.2010.

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.

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.

The healthcare reform act needs to be amended to allow for catastrophic plans for people over 30 years of age. 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.

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