Personal Health Care Accounts

Overview

Consumer-directed health care is a sensible way to help manage health care costs. Personal health care accounts are funding arrangements where health care expenses are paid (or reimbursed) with dollars set aside in pre-tax accounts. These pre-tax contributions can be made by the employer, the employee, or both, depending on the type of account. In fact, federal law recognizes three types of tax-favored personal health accounts:

• Health Savings Accounts (HSAs)
• Flexible Spending Arrangements (FSAs)
• Health Reimbursement Arrangements (HRAs)

Each differs in many respects, but they all award tax advantages to help individuals (and/or employers) offset the cost of health care.

At Issue

Over the years Congress has worked to make these health care accounts more accessible and easier to manage. The American Dental Association greatly supports those efforts. Such accounts provide another opportunity for patients, as well as dentists and their employees, to afford the health and dental care they need.

ADA Priorities

While the ADA strongly supports these consumer directed health care options, we are dismayed that dental supplies such as dental floss, toothbrushes, toothpaste, fluoride supplements and other over-the-counter dental products¹ are excluded from the Internal Revenue Services’ list of reimbursable items. The ADA supports amending existing law to allow for consumers to purchase such dental items, including fluoride toothpaste, powered and manual toothbrushes, dental floss, dental cleaners, oral irrigators, and preventive and therapeutic mouth rinses and toothpastes.

¹26 CFR § 1.213-1(e) specifies that the term medicine and drugs “shall not include toiletries or similar preparations (such as toothpaste, shaving lotion, shaving cream, etc.) nor shall it include cosmetics (such as face creams, deodorants, hand lotions, etc., or any similar preparation used for ordinary cosmetic purposes) or sundry items.”

Contact Us

For additional information, please contact:

• Michael Graham, Senior Congressional Lobbyist, Congressional Affairs
• Frank Kyle, D.D.S., Manager, Legislative & Regulatory Policy, Federal Affairs

Federal Affairs
1111 14th Street NW, Suite 1100 Washington, DC 20005
202.898.2400
Fax: 202.898.2437
E-mail: govtpol@ada.org

State Government Affairs
ADA Chicago Headquarters
211 East Chicago Avenue
Chicago, IL 60611
312.440.2525
Fax: 312.440.3539
E-mail: govtpol@ada.org