The Personal Health Investment Today Act (H.R. 2105)

The following is detailed information on the Personal Health Investment Today (PHIT) Act (H.R. 2105). This bill is currently before the U.S. House of Representatives Committee on Ways & Means. If you would like to support this bill, join the virtual march on Washington by visiting http://campaign4health.org.

The PHIT Act (H.R. 2105) would eliminate a federal policy barrier and create a financial incentive for Americans to engage in physical fitness and exercise.

Americans could utilize up to $1,000 annually from their tax-favored accounts (such as FSAs and MSAs) to make expenditures related to organized individual and team sports, fitness and exercise, recreation and other physical activities. The PHIT Act would not increase the total contribution limits to those pre-tax accounts.

• 64% of American adults and 34% of American children suffer from overweight, obesity, and physical inactivity. These rising rates of obesity and Americans’ proclivity for inactivity are resulting in double digit annual increases in healthcare costs to the government and business.

• The Centers for Disease Control and Prevention (CDC) estimates that healthcare costs directly associated with inactivity were $76.6 billion in 2000; roughly one-third of those costs ($25 billion) fall directly on U.S. taxpayers since approximately one in three Americans is covered by a taxpayer-funded health plan.

• The PHIT Act would help to reverse the trend of increasing physical inactivity and obesity by eliminating a federal policy barrier and providing an important tax incentive to promote exercise.

• Public health experts agree that regular physical activity substantially reduces the risk and symptoms of numerous chronic diseases and medical conditions, resulting in fewer hospitalizations, physician visits, medications and lower health care costs.

• The PHIT Act would change the types of expenditures that could be payable out of tax-favored investment accounts: flexible spending accounts (FSAs), medical savings accounts (MSAs) and/or medical reimbursement arrangements.

• Under the current set-up, Americans predominantly use pre-tax accounts to pay for treatment and detection of illnesses: prescription drugs, doctor visits, examinations and screenings.

• The PHIT Act would allow consumers to to pay with pre-tax dollars for prevention in the form of increased physical activity, including:

• fitness center dues
• group exercise classes
• youth sports league fees
• some exercise equipment
• other fees associated with physical activity programs

• Depending upon their income tax bracket, the PHIT Act could help Americans save 20-30% on the cost of physical activities, exercise programs and related expenses.

• The PHIT Act tax incentive represents an important tangible benefit that the federal government can provide to promote healthier lifestyles and reverse the rising costs of treating obesity-related chronic diseases.

• Fitness-related tax savings would provide a great incentive for Americans to take an important first step toward reversing their sedentary lifestyles and lowering healthcare costs.

Why is the PHIT Act necessary?
The PHIT Act would eliminate a federal policy barrier and create a financial incentive to engage in physical fitness and exercise.

What will the PHIT Act do?
The PHIT Act would change the types of expenditures that could be payable out of tax-favored investment accounts (such as FSAs and MSAs). Under the current set-up, Americans predominantly use pre-tax accounts to pay for treatment and detection of illnesses: prescription drugs, doctor visits, examinations and screenings.

The PHIT Act would allow consumers to set aside up to $1,000 ($2,000 per family) annually from their tax-favored accounts to make expenditures related to prevention in the form of increased physical activity, allowing fitness center dues, payments for some exercise equipment, and other fees associated with physical activity programs to be paid with pre-tax dollars.

What will the PHIT Act cost?
IHRSA has met with the Congressional Joint Committee on Taxation and has requested an immediate “score” for the PHIT Act, which will determine the total cost of implementing the bill over a ten year period.

Who is supporting the PHIT Act?
IHRSA has gathered broad support for the PHIT Act during previous sessions of Congress. The PHIT Act was re-introduced in the U.S. House of Representatives on April 27, 2009 by Representative Ron Kind (D-WI) and referred to the House Committee on Ways and Means. Co-sponsors, at the time of introduction, include Representatives Earl Blumenauer (D-OR), Kevin Brady (R-TX), and Zach Wamp (R-TN). (Full co-sponsor list.)