Sponsors (5)
The bill makes everyday oral-care items tax-free through consumer-directed health accounts, reducing consumer costs and harmonizing rules, at the cost of modest lost tax revenue, administrative burdens for employers and administrators, and some potential qualification uncertainty.
People who use HSAs, FSAs, or HRAs can buy toothbrushes, water flossers, and certain OTC oral-care products tax-free, lowering out-of-pocket oral-hygiene costs.
Employees with employer-provided FSAs or HRAs get increased benefit value for everyday oral hygiene without higher premiums, improving take-home value of benefits.
Aligning eligibility across HSAs, Archer MSAs, FSAs, and HRAs creates more consistent rules and reduces tax and administrative confusion for consumers and plan administrators.
Employers and plan administrators will incur one-time and ongoing administrative costs to update plan documents, vendor systems, and point-of-sale acceptance for newly eligible items.
Expanding qualified medical expenses reduces taxable income and therefore tax revenue, which could slightly increase the deficit or require offsets.
Consumers may face confusion or disputes over whether specific OTC oral-care products qualify if their FDA recognition status under 21 U.S.C. §355f is unclear, creating compliance and fairness issues.
Based on analysis of 2 sections of legislative text.
Allows specified OTC anticavity/antiplaque topical drugs, toothbrushes, and water flossers to be treated as qualified medical expenses for FSAs, HRAs, HSAs, and Archer MSAs.
Treats certain over-the-counter oral care items as eligible medical expenses for tax-advantaged accounts. It adds a definition of “oral healthcare product” that covers OTC anticaries and antiplaque/antigingivitis topical drugs, and makes toothbrushes (manual or electric) and water flossers eligible for FSAs, HRAs, and HSAs for expenses incurred after enactment.
Introduced February 11, 2025 by Jefferson Van Drew · Last progress February 11, 2025