H.R. 6312 would amend the Internal Revenue Code to allow qualified sports and fitness expenses to be treated as medical care expenses, enabling those expenses to be reimbursed from Health Savings Accounts (HSAs), Archer Medical Savings Accounts, health Flexible Spending Arrangements (FSAs), and Health Reimbursement Arrangements.
Subject to certain limits, contributions made by an individual to those accounts are deductible for income tax purposes and those made by an employer, including through cafeteria plans, are excludible for both income and payroll tax purposes. Under current law, qualified medical expenses include expenses related to diagnosis, treatment, and prevention of diseases and certain long-term care expenses. Fitness-related expenses such as gym memberships, fitness programs, and safety equipment currently do not qualify as medical expenses. Under H.R. 6312, amounts up to $500 of sports and fitness expenses and up to $250 of safety equipment for any taxpayer in any taxable year would be treated as qualified medical care expenses.
The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 6312 would reduce revenues by $3.5 billion over the 2019-2028 period. The change in revenues includes a reduction of about $1 billion over the 2019-2028 period that would result from changes in off-budget revenues (from Social Security payroll taxes). CBO estimates that enacting H.R. 6312 would not affect direct spending.
The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting revenues or direct spending. The net changes in revenues and direct spending that are subject to those pay-as-you-go procedures are shown in the attached table. Only on-budget changes to revenues and direct spending are subject to pay-as-you-go procedures.
CBO and JCT estimate that enacting H.R. 6312 would increase on-budget deficits by more than $5 billion in at least one of the four 10-year periods beginning in 2029. CBO estimates that enacting the bill would not increase net direct spending in any of the four consecutive 10-year periods beginning in 2029.
JCT has determined that the bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.