As talk of health care reform heats up Washington, one health-related tax bill in Congress could reduce health care expenses for employers and employees.
If the Personal Health Investment Today Act were to become law, the costs of youth and adult sports organization fees, gym memberships, race registrations and even ice skates could be absorbed by pre-tax medical accounts by up to $2,000.
Proponents of the act say it would provide an incentive for people to stay active to prevent health care costs related to inactivity and chronic, long-term diseases.
It’s a bill that’s been in the works for about a decade and is expected to be reintroduced to Congress by the start of next month, said Bill Sells, senior vice president for government relations and public affairs for The Sports and Fitness Industry Association, a Maryland-based organization that supports the bill.
“The reason we are optimistic this year is because of the agenda … health care and taxes,” Sells said, referring to President Trump and the new administration which is seeking to repeal the Affordable Care Act.
It’s a tax bill that provides a tax incentive to encourage people to be more active, and has been around long before the ACA and has no ties to the ACA repeal effort, Sells said.
However, the ACA repeal effort could open the door to encourage legislators to adopt the PHIT Act.
“The repeal … has provided an opportunity that would not have been possible,” Sells said. “I think there is a general consensus, this would be a way to improve our health care system by getting people active. We cannot Medicare ourselves to health.”
Sells said the PHIT Act is supported by one in five members of Congress, both Democrats and Republicans.
The expenses that could be absorbed by pre-tax medical accounts cover a wide range of sports and fitness-related expenses – basically, any expense that’s incurred for the sole purpose of physical activity.
As an example, a parent registering a child for a youth sports team could apply the fee for membership toward the pre-tax account. The same would apply for personal training fees, fitness equipment and gym memberships.
While apparel and footwear does not qualify for the account, there are exceptions for the purchase of specific sports-related items such as ice skates, swim fins and cleats, Sells said.
“The reason we feel this is so important, in previous generations, physical activity was built into our daily lives,” Sells said. “Today, we have more desk jobs, we shop online. Casual play disappeared.”
The good news is that the number of organized sports leagues and teams has grown, along with gyms, but the problem is it all costs the consumer money, Sells said.
He’s hopeful that the bill will help lessen the cost barrier and encourage a culture change of activity. Presumably, employers also would benefit with a healthier workforce.
One local official saw the PHIT Act more as a way for people who belong to a gym to take a tax deduction and that there may be better vehicles to increase physical activity.
“Anything that encourages increasing physical activities is admirable, however, I can’t get excited about this legislation,” said Tom Croyle, president of the Lehigh Valley Business Coalition on Healthcare in Bethlehem.
“It would appear to me it might be beneficial to club owners and trainers, who I believe are the prime movers.”
For the PHIT Act to be effective, there has to be a measurable aspect for employers to ensure people are doing the activity, said Dr. Tom Meade, an orthopedic surgeon at South Whitehall Township-based Coordinated Health.
For example, if an employee signs up for a race, he should submit his entry tag and finishing time, he said.
Those who sign up for gym memberships should have some document showing how often they go, Meade added.
Meanwhile, companies get a return on investment in the form of increased productivity and decreased health care costs, he said.
Meade said he supports the PHIT Act, noting that it is intended to fulfill the triple aim of health since it offers improved population health, patient experience in the health care system and decreased costs which today are unsustainable in this country.
“I strongly, strongly endorse it,” he said. “This does everything that our legislators want in health care. I believe all of this should be tax deductible in a health savings account but should have measurable outcomes.”
Anything that decreases health care costs should be considered in Congress, Meade said.
“I don’t see why something like this doesn’t make enormous sense,” he said.