S. 4587: Dietary Supplements Access Act

This bill, known as the Dietary Supplements Access Act, proposes changes to the U.S. tax code that would allow individuals to treat certain expenses for dietary supplements as qualified medical expenses under specific tax-advantaged accounts. Here are the main provisions:

Qualified Medical Expenses

The bill amends the Internal Revenue Code to define dietary supplements as qualified medical expenses, which means expenses for these supplements can be paid for using specific tax-advantaged accounts. The provisions of the bill include:

• Health Savings Accounts (HSAs): Individuals can use funds from their HSAs to cover up to $500 ($250 for married individuals filing separately) in dietary supplement expenses each taxable year.
• Archer Medical Savings Accounts (MSAs): Similar to HSAs, individuals can also use their Archer MSAs for dietary supplements, with the same limits of $500 ($250 for married individuals filing separately) per year.
• Health Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs): Expenses incurred for dietary supplements can be reimbursed under these arrangements, also subject to the same limits as HSAs and MSAs.

Definition of Dietary Supplements

The bill defines "dietary supplements" in accordance with existing federal law, specifically referencing the definition from the Federal Food, Drug, and Cosmetic Act. It excludes products that are commonly understood to be energy drinks, soft drinks, or sodas. This definition helps to clarify what types of products are eligible under this bill.

Effective Dates

The amendments proposed in this bill would take effect for amounts paid after December 31, 2026, for HSAs and MSAs. For flexible spending arrangements and health reimbursement arrangements, the rules would apply to expenses incurred after December 31, 2026.

Summary of Impacts

The primary impact of this legislation would be to allow individuals to utilize their tax-advantaged health accounts to offset the costs of dietary supplements, thereby potentially increasing access to these products, promoting preventive health measures, and providing financial relief for consumers purchasing dietary supplements that they consider necessary for their health.

Relevant Companies

• UNFI: United Natural Foods, Inc. is a distributor of natural and organic foods, which could see an increase in sales of dietary supplements as more consumers might use tax-advantaged accounts to purchase them.
• GSY: GNC Holdings, Inc. specializes in health and wellness products, including dietary supplements. They may benefit from expanded market access if consumers can use their health accounts to purchase supplements.