Updated on Nov. 2, 2017.
For a few years now, NRPA’s Public Policy Team has been supportive of the Personal Health Investment Today Act or the PHIT Act (H.R.1267/S.482). This piece of legislation would allow individuals to avoid out-of-pocket costs for physical activity by using up to $1,000 ($2,000 for couples) from their Health Savings Accounts (HSAs) and Flexible Savings Accounts (FSAs).
Under the PHIT Act, these accounts could be used to pay for organized, individual, and team sports, fitness and exercise programs, and recreation activities. As park and recreation agencies, you know firsthand how critical it is to get people moving and active. NRPA believes the PHIT Act is a fantastic opportunity for families and individuals to utilize their HSA funds to cover any member or activity fees your agency may need to charge.
Congress recently decided to pave the way for a tax reform debate after wrapping up FY2018 budget negotiations earlier than expected. A tax reform package will only now be possible if included as part of budget reconciliation for FY2018, the vehicle by which Congress attempted to complete healthcare repeal as part of FY2017. Comprehensive tax reform legislation has not happened since the mid-1980s, so proposals submitted for consideration will certainly take many shapes and sizes.
While tax reform would be a logical piece of legislation where the language of the PHIT Act can be included, unfortunately budget reconciliation rules prohibit something like the PHIT Act to be attached. However, we want to encourage members of Congress and their staff to still consider the PHIT Act as part of an end of the year budget deal as they consider a variety of tax reform proposals.
Specifically, the PHIT Act (S.482/H.R.1267) would amend Section 213(d)(1) of the Internal Revenue Code of 1986 and add a section titled “Qualified Sports and Fitness Expenses” which would:
- Allow pre-tax medical accounts to pay for expenses associated with the sole purpose of being physically active, including:
- Membership at a fitness facility;
- Participation or instruction in a program of physical exercise or physical activity; and
- Equipment for use in a program (including a self-directed program) of physical exercise or physical activity. (Legislation prohibits equipment funds to be used for apparel or footwear and any sports equipment purchase, other than exercise equipment, cannot exceed $250.)
The PHIT Act has enjoyed tremendous bi-partisan, bi-cameral support with 93 co-sponsors in the House and 12 co-sponsors in the Senate. Tax reform negotiations offers a unique window of opportunity to raise the profile of the PHIT Act and encourage Congress to attach it to an end of year budget deal. Join us in advocating for the health of our communities and ensuring we can all enjoy a more active lifestyle.
Kate Sims is NRPA’s Government Affairs Manager.