Tax Deduction for Self-Care Expenses
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Tax Deduction for Self-Care Expenses Scott Melville President & CEO Consumer Healthcare Products Association
description
Tax Deduction for Self-Care Expenses. Scott Melville President & CEO Consumer Healthcare Products Association. We are c ommitted to promoting the role of OTC and Dietary Supplement products through science, education, and advocacy. S erving the self-medication industry since 1881. 2. - PowerPoint PPT Presentation
Transcript of Tax Deduction for Self-Care Expenses
Tax Deduction for Self-Care Expenses
Scott MelvillePresident & CEOConsumer Healthcare Products Association
We are committed to promoting the role of OTC and Dietary Supplement products through science, education, and advocacy.
Serving the self-medication industry since 1881
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Self-Treatment Saves Time and Money
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Health Insurance Coverage in the U.S., 2010
Total: 305.2 Million
Medicare: 12%
Medicaid: 17%
Uninsured: 16%
Employer-Sponsored Insurance: 49%
Private: 5%
SOURCE: KCMU/Urban Institute analysis of 2011 ASEC Supplement to the CPS.
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Avg. Annual Health Insurance Premiums and Worker Contributions for Family Coverage, 2005-10
2005 2010
Employer Contribution Worker Contribution
$2713
$10,880
$13770
$3997
$8167
$9773
27 %
20 %
47 %$2713
$3997
$1,284 Worker Contribution Increase
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2010.
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National Health Expenditure and % of GDP, 1960-2009
19601970198019902000200120022003200420052006200720082009$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$ in Billions
13.8%
17.6%
16%
5.2%
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group
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HSA vs. FSAHSA Health Savings Accounts
FSA Flexible Spending Arrangements
Overview A bank account to save and pay for medical expenses tax-free.
Pays for out-of-pocket expenses not covered by medical plan tax-free.
EligibilityMust accompany a high-deductible health insurance plan.
Eligibility is set by your employer.
Rollover/Portable? Yes No
Annual Contribution
• Single coverage limit: $3100• Family coverage limit: $6250
• No current limit• In 2013, limit will be $2500.
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Examples of Eligible Medical Expenses• Bandages• Contact lenses• Insurance co-payments• Dentures• Diabetic monitors• Eyeglasses• Hearing aids• Insulin• Medical equipment
• Orthotics• Orthodontia• Prescription medicines• X-rays
Source: www.wageworks.com
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FSA Participation By the Numbers
Source: According to the Employers Council on Flexible Compensation (ECFC), 2008
# of Participating Americans
35 Million
Annual Salary $55,000
Annual FSA Contribution $1386
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Rev. Rul. 2003-102: Reimbursements of OTCs Are Excludable from Gross IncomeEffective Sept. 22, 2003
‘‘Self-insured medical reimbursement plans: This ruling holds that employer reimbursements of amounts paid by an employee to purchase nonprescription medicines and drugs are excludable from gross income under section 105(b) of the Code.’’
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SEC. 9003 Distributions For Medicine Qualified Only for Prescribed Drug or InsulinEffective Jan. 1, 2011
‘‘Reimbursement for expenses incurred for a medicine or a drug shall be treated as a reimbursement for medical expenses only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.’’
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2010 Healthcare Reform Law Intent vs. Reality
Intent of Law
Decrease Costs
Expand Access
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Industry Imperative
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The Value of OTC Medicine to the United States
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7 Most Common Self-Treatable Conditions
AllergyAnalges
ics
Anti-fungal
Cough/Cold
Medicated Skin
Lower GI
Upper GI
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OTC Industry Value to Consumers
Access Trust
Empowerment Affordability
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“This study shows how important over-the-counter medicines are for millions of
American families”
Source: Nobile Photo
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Health Choices Coalition Members Aetna America’s Health
Insurance Plans American Academy of
Dermatology Association
American College of Physicians
American Medical Association
American Osteopathic Association
American Society for Association Executives
Bayer HealthCare Consumer Care
Blue Cross Blue Shield Association
Consumer Healthcare Products Association
CVS Caremark Food Marketing
Institute National Association of
Chain Drug Stores National Association of
Manufacturers National Community
Pharmacists Association
National Federation of Independent Business
National Grocers Association
Prime Therapeutics Retail Industry Leaders
Association Sjögren’s Syndrome
Foundation U.S. Chamber of
Commerce Wellpoint
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House Ways and Means Committee FSA Hearing, April 25, 2012
Source: Nobile Photo
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Gaining Momentum
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