Trade Groups Seek HSA/FSA and SNAP Benefit Coverage for Supplement Purchases

Dietary supplement trade organizations asked the Internal Revenue Service (IRS) and United States Department of Agriculture (USDA) to change policy that would enable Americans to spend funds from Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) and the Supplemental Nutrition Assistance Program (SNAP), respectively, on dietary supplements.

Graham Rigby, president of the American Herbal Products Association (AHPA); Scott Melville, president and CEO of the Consumer Healthcare Products Association (CHPA); Steve Mister, president and CEO of the Council for Responsible Nutrition (CRN); and Loren Israelsen, president of the United Natural Products Alliance (UNPA) jointly submitted these requests to Brooke Rollins, USDA Secretary, and Scott Bessent, Treasury Secretary and IRS Acting Commissioner.

In a separate letter to IRS Commissioner Billy Long, the Natural Products Association (NPA) also requested that the IRS update its policy to allow for customers to use HSA/FSA funds on dietary supplements.

Industry advocates have long advocated for both of these policy changes, and noted in each letter that these initiatives would require no Congressional involvement and would be in line with the Trump Administration’s “Make America Healthy Again (MAHA)” agenda, which establishes via executive order that “agencies shall ensure the availability of expanded treatment options and the flexibility for health insurance coverage to provide benefits that support beneficial lifestyle changes and disease prevention.”

In the joint letter to Bessent, AHPA, CRN, CHPA, and UNPA requested a revision to the IRS’ Publication 502 to permit dietary supplement purchases to be considered “medical expenses” under the Internal Revenue Code; this would allow Americans to be reimbursed from their HSAs and FSAs for the out-of-pocket expenses they pay for dietary supplements. Publication 502 expressly excludes “nutritional supplements” from the definition of medical expenses. However, the IRS defined medical care in 1954 as “amounts paid for the diagnosis, cure,, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body,” which is in line with federal definitions of dietary supplements, such as the Dietary Supplement Health and Education Act of 1994 (DSHEA), the trade groups noted.

More than 39 million Americans have nearly $147 billion in HSAs, and 37 million Americans have FSAs through their employers, the authors noted, but the 75% of Americans who take supplements to maintain and improve their health cannot use these funds to help with costs. Allowing for these programs to reimburse supplement purchases will lead to improved health and free up household resources for other needs, they said.

Daniel Fabricant, PhD, president and CEO of NPA, also requested an amendment to Publication 502. While HSA/FSA funds can be used on select supplements if they’re prescribed by a doctor to treat a specific medical condition, Fabricant said that this limitation “adds no clinical benefit and instead creates costly and unnecessary barrier to supporting Americans’ heath, forcing consumers to schedule doctor appointments solely for permission to buy widely available, FDA-regulated products that are used every day to support immune health, heart health, cognitive function, and more.”

Fabricant suggested amending Publication 502 to read “You can include in medical expenses the cost of ‘dietary supplements,’ […] provided that such products are labeled with an FDA-authorized health claim, bear statements describing how they are intended to affect the structure or function of the human body, or include statements characterizing the documented mechanism by which the product maintains such structure or function.”

Similarly, in the joint letter to Rollins, AHPA, CRN, CHPA, and UNPA leaders noted that SNAP’s purpose is to “promote the general welfare and to safeguard the health and well-being of the nation’s population by raising the levels of nutrition among low-income households,” however, long-ago decisions deny SNAP recipients from using these funds on a daily multivitamin. Citing National Health and Nutrition Examination Survey  (NHANES) data, they also noted that a majority of the 40 million Americans who use SNAP are failing to meet recommended amounts of vitamins A, C, E, and D, calcium, and magnesium. “The proposal does not increase the cost of the SNAP program – it simply empowers low-income consumers with an additional healthy choice for better nutrition. The average price of a multivitamin is about a dime a day,” they noted. Per the 2015-2020 Dietary Guidelines for Americans, these aforementioned vitamins are considered “nutrients of public health concern” due to the issues associated with low intake. “And evidence shows taking a multivitamin is associated with healthier habits, including healthier eating, weight, and regular exercise,” the authors noted.

Bills to expand HSA and FSA accounts to include spending on dietary supplements have been introduced in the past, but never passed a final vote to be signed into law. Legislation to enable recipients to spend SNAP funds on dietary supplements has passed in both the Senate and the House in the past.