Sens. Tom Harkin, D-Iowa, and Orrin Hatch, R-Utah, longtime supporters of complementary and alternative medicines, recently introduced legislation that, if passed, will make the cost of dietary supplements tax deductible for employers and excluded from taxable income for employees.
The "Dietary Supplement Tax Fairness Act of 2001" (S.1330) seeks to amend the Internal Revenue Code of 1986. According to language in the bill, the act will "provide that amounts paid for foods for special dietary use, dietary supplements or medical foods shall be treated as medical expenses," provided that certain criteria are met first.
"Unfortunately, today the tax code provides this sensible tax treatment for these products only if they are prescribed drugs," said Harkin, who introduced the bill on behalf of himself and Sen. Hatch on Aug. 2 in a statement before Congress.
"Our current policy is unfair," Harkin said. "It's failing to take full advantage of the potential to improve health and hold down health care costs through preventative health care practices available to consumers," he said.
Fair treatment means dietary supplements would have to be offered as part of a health insurance plan. In addition, the vitamins, herbs and medical foods covered will be required to meet the U.S. Food and Drug Administration's still-pending Good Manufacturing Practice Standards.
"S. 1330 only allows tax deductibility for insurance premiums when the supplements purchased under the plan are in compliance with applicable FDA GMPs or other comparable standards," said David Seckman, the National Nutritional Foods Association's executive director.
In 1994, the Dietary Supplement Health and Education Act called on the FDA to develop and implement GMPs. Harkin and Hatch have repeatedly pushed the FDA to produce and implement these consumer protections. "After seven years, draft GMPs were published in the Federal Register but have not been finalized. I am hopeful that these final standards will be put in place without further delay," Harkin said.
The senator also noted that insurance companies and employers are dismayed by the lack of consistency in the tax code. "Many Americans are using these health care products to improve their health and to stay healthy," Harkin said. "Insurance companies and employers responding to this consumer demand have been frustrated by being unable to offer a benefit like this in a manner consistent with other health care practices that receive favorable consideration in the Internal Revenue Code."
"The Harkin-Hatch bill would change the IRS code to create an incentive for millions of Americans who invest in preserving their own health," said Michael McGuffin, president of the American Herbal Products Association. "All AHPA members should consider requesting that their elected representatives support bill S. 1330."
The "Findings" written in the bill clearly outline the proalternative-medicine sentiments of Harkin and Hatch. They state that dietary supplements and medical foods "have been shown through research and historical use to be a valuable benefit to human health, in particular, disease prevention and overall good health."
The findings also note that parents would be financially covered to pay for dietary needs for children with metabolic disorders and autism, and that all individuals with diabetes, auto-immune disorders such as AIDS and chronic inflammatory conditions, would also benefit from the act.
"Senators Harkin and Hatch are to be commended for their commitment toward placing dietary supplements on a level playing field, when it comes to insurance coverage and tax deductibility, with other medical expenses," said NNFA's Seckman. "We gladly second the senators' emphasis on promoting quality supplements to American consumers."
The complete text of Senate bill 1330 can be found by searching the Congressional Record at www.access.gpo.gov.
Steve Taormina is a freelance writer based in Nederland, Colo.
Natural Foods Merchandiser volume XXII/number 9/p. 3, 9