U.S. Congress Re-introduces PHIT Act to Incentivize Physical Activity

The Personal Health Investment Today (PHIT) Act was reintroduced in the U.S. Senate and House of Representatives on March 14.

If passed, the PHIT Act would allow Americans to use a portion of the money saved in their pre-tax health savings account (HSA) and flexible spending account (FSA) toward qualified sports and fitness purchases, such as gym memberships, fitness equipment, and youth sports league fees.

Currently, Americans can designate up to the maximum—$3,050 in 2023—pre-tax to an employer-managed FSA or HSA to purchase nonprescription items, glasses, sunblock, bandages, over the counter products, and a variety of products and services to protect and improve their health. This includes services such as in-home lead paint abatement, disability adaptive programs and services, transportation for medical appointments and services, as well as thousands of products sold by retailers, drug stores, and suppliers.

If funds are not used by the spending deadline, the money is forfeited to employers. About 40 percent of people with an FSA don’t use all of their contributions, on average losing about $339 to $408 each year. In 2019, those who contributed to their FSA forfeited in total about $3 billion while in 2020, they forfeited about $4.2 billion, according to analysis by Money.com

IHRSA, the trade association for health clubs, praised the reintroduction of the PHIT Act, saying it “brings equity to the tax treatment of products and services that directly benefit the physical and mental health of consumers” and supports behavior that improves health and fitness.

“The health and fitness industry is as diverse as the communities we serve, and that is why more than 70 million consumers regularly visit clubs, studios, classes, community programs, and other group and structured exercise programs,” IHRSA President and CEO Liz Clark said. “Better fitness improves individual health [and] community health, will support better military recruitment and retention, and helps provide vital mental and physical health for all Americans. We applaud our bipartisan leaders in the House and Senate and look forward to mobilizing our nationwide grassroots coalition to push for passage.”

The PHIT Act has been introduced in every Congressional session since the 109th Congress. In 2018, the PHIT Act passed through the U.S. House of Representatives as part of the Restoring Access to Medication Act of 2018, a broader package on HSAs. It was the first and only time the legislation passed the entire House. It did not pass the Senate that year.

“The pandemic gave us a new appreciation for the physical and mental health benefits of activity,” said Tom Cove, president and CEO of the Sports and Fitness Industry Association (SFIA). “The PHIT Act is a common-sense solution to allow more Americans to participate in sports, exercise and recreate in the outdoors by making such activities more affordable and accessible.”

U.S. Sens. John Thune (R-South Dakota) and Chris Murphy (D-Connecticut), members of the Senate Finance Committee, and U.S. Reps. Mike Kelly (R- Pennsylvania) and Jimmy Panetta (D-California), members of the House Committee on Ways and Means, reintroduced the legislation in the 118th Congress. It is cosponsored by U.S. Sens. Tammy Baldwin (D-Wisconsin), Shelley Moore Capito (R-West Virginia), Kevin Cramer (R-North Dakota), Roger Marshall (R-Kansas), Tim Scott (R- South Carolina.), Kyrsten Sinema (D-Arizona), Thom Tillis (R-North Carolina), and Roger Wicker (R-Missouri) and U.S. Reps. Brendan Boyle (D-Pennsylvania), Brian Fitzpatrick (R- Pennsylvania), Darin LaHood (R-Illinois), and Terri Sewell (D-Alabama). 

IHRSA encourages health club and studio operators to contact their Congress members about passing the PHIT Act and offers more information on its website.