Expanding Health Savings Accounts to Cover Over-the-Counter Drugs, Menstrual Products & More Healthcare Expenses (H.R. 6199)

What is H.R. 6199?

(Updated November 15, 2018)

This bill — the Restoring Access to Medication and Modernizing Health Savings Accounts Act — would overhaul health savings accounts (HSAs) to make them more useful for covering healthcare costs related to medication and other expenses that contribute to an individual’s health. It contains the legislative text of five related bills that passed the House Ways and Means Committee with bipartisan support, summaries of which can be found below.

Restoring Access to Medication Act of 2018: This section of the bill would repeal a provision of the Affordable Care Act (commonly known as Obamacare) that limits payments for medications from HSAs, medical savings accounts (MSAs), flexible spending arrangements (FSAs), and health reimbursement arrangements (HRAs) to only prescription drugs. In effect, this would allow funds from such accounts to be used for over-the-counter drugs, and also menstrual care products.

Bipartisan HSA Improvement Act: This section of the bill would make three changes to HSAs: 1) it’d clarify that employment-related services (like on-site clinics) wouldn’t be considered disqualifying coverage under HSAs; 2) eligible individuals could make HSA contributions if a spouse has a flexible spending account (FSA) as long as the FSA doesn’t reimburse expenses of the spouse with the HSA; and 3) FSAs and Health Reimbursement Accounts (HRA) could be terminated or converted to fund HSAs.

Personal Health Investment Today (PHIT) Act: This section of the bill would allow individuals to pay for a gym membership, exercise classes, or related equipment for themselves or their dependants using funds from a tax-preferred health savings account (HSA) or flexible spend account (FSA).

The overall limitation on such tax-preferred expenses would be $500 annually (or twice that for a joint return or head of household), while the limit for safety equipment would be $250 annually. These amounts would be adjusted for inflation and rounded to the nearest $10 each year. This legislation would take effect for tax years beginning after December 31, 2018.

Golfing, hunting, sailing, and riding wouldn’t be considered qualified physical activities. Memberships at facilities offering those activities, or at private clubs owned and operated by members, wouldn’t be qualified. Exercise videos, books, or similar materials wouldn’t be considered qualified exercise equipment.

Primary Care Enhancement Act: This section of the bill would prevent individuals who participate in a direct primary care (DPC) arrangement from losing their HSA eligibility because of their participation. It’d also allow funds from HSAs to be used for DPC provider fees.

Promoting High-Value Health Care Through Flexibility for High Deductible Health Plans Act: This section of the bill would expand access and enhance the utility of HSAs by allowing plans to cover for high value, low-cost services like telehealth, chronic disease management, diabetic testing strips, or primary care visits below the deductible while maintaining their HSA eligibility.

Argument in favor

This bipartisan bill would empower Americans by expanding Health Savings Accounts to cover more healthcare expenses, like over-the-counter drugs, and letting them be paired with consumer-directed insurance coverage.

Argument opposed

This bill is really just a tax break for people who have Health Savings Accounts, which typically only wealthy Americans have. Congress should focus on undoing the damage it’s done to Obamacare.

Impact

Individuals with HSAs and similar tax-preferred accounts; healthcare providers; pharmacies; and the IRS.

Cost of H.R. 6199

A CBO cost estimate is unavailable.

Additional Info

In-Depth: The Restoring Access to Medication Act passed the committee on a 24-10 vote with the support of three bipartisan cosponsors, including Reps. Grace Meng (D-NY), Erik Paulsen (R-MN), and Ron Kind (D-WI). Sponsoring Rep. Lynn Jenkins (R-KS) said:

“Over-the counter medications are often the front-line treatment for many illnesses or for maintenance of chronic diseases and should be treated as medically-reimbursable health care therapies just as prescription medications are.”

Some House Democrats opposed the bill, writing:

“While the inclusion of menstrual care products addresses an unfair bias against women in the current tax code, the fact that the legislation is unpaid for is a cause for concern and in no way addresses the broader discrimination women are facing in accessing health care under the Republican administration.”

The Bipartisan HSA Improvement Act passed the committee on a 26-13 vote with the support of one cosponsor, Rep. Earl Blumenauer (D-OR). Sponsoring Rep. Mike Kelly (R-PA) said: “Ultimately, this bill modernizes health care delivery and gives employers freedom to innovate and improve their employees’ health.” Some Democrats opposed the bill, writing that “HSAs mostly benefit high-income taxpayers while doing little to help moderate-income families or the uninsured.”

The Personal Health Investment Today (PHIT) Act passed the committee on a 28-7 vote with the support of two bipartisan cosponsors. Sponsoring Rep. Jason Smith (R-MO) said it “will help our children get active by allowing people to use tax preferred accounts to cover the cost of their children’s sports programs” among other exercise-related expenses. Some House Democrats expressed opposition to the bill, saying it’d “allow and HSA or FSA to be used for services that might never be used or might not directly improve an individual’s health.”

The Primary Care Enhancement Act passed the committee on a 26-12 vote with the support of two bipartisan cosponsors. Sponsoring Rep. Erik Paulsen (R-MN) explained that it’d improve direct primary care arrangements, where “instead of paying a doctor a fee every time you need a procedure, you’ll pay a monthly subscription and hire a doctor you’re going to keep to keep you well.” Some Democrats expressed opposition to the bill, writing that it “does not undo sabotage, premium hikes, and benefit cuts have caused over the past 18 months.”

The Promoting High-Value Health Care Through Flexibility for High Deductible Plans Act passed the committee on a 24-14 vote with the support of two bipartisan cosponsors. Its sponsor Rep. Peter Roskam (R-IL) said that “by providing these options, consumers are incentivized to take control of their health and use services to reduce costs down the line.” It was opposed by some Democrats, who wrote that “High Deductible Health Plans and Health Savings Accounts do not promote healthy behavior.”

Media:

• House Ways and Means Committee Press Release