"Insider Speaks"
One Club Owner's Opinion #2 - We Should Scrap the PHIT Act... I Know, OUCH!
- For this article, Log In to:
-
Download PDF
Steve Vucovich
Publisher's Note: Club Insider was founded on the principle of "Telling It Like It Is..." This month, our friend Steve Vucovich, Managing Director of Club Apple in Idaho Falls, Idaho, has submitted an article that truly does that. Though the opinion that is about to be expressed may ruffle some feathers, whether or not that opinion is right or wrong is irrelevant, but the conversation needs to be had. That is because the idea of passing the PHIT Act has been around for what is now decades. Heck, I remember first reading about it when I was in college (I graduated in 2007). That is why I made the decision to put this article up front and center as an "Insider Speaks" editorial. I welcome your opinions, counterpoints or supporting comments at justin@clubinsideronline.com. They can remain private or be utilized in any future write-ups on this subject; please specify your choice if you provide a submission. Thank you, Steve, for going out on the limb here with this article, containing a well-articulated opinion.
• • •
It is my opinion that the Health & Fitness Association (HFA, formerly IHRSA) should scrap the PHIT Act and develop a new bill, one that is designed solely around the club/gym/boutique fitness industry and not watered down by different industry lobbyists. Essentially, a new bill that offers new/different industry participation incentives, because the use of HSA dollars offers little incentive for the bulk of the population and makes no economic sense for Government. IHRSA was predominately formed to promote and strengthen our industry, not Spaulding's, or Wilson's, or NIKE's, etc. That is the reason I joined IHRSA 30+ years ago.
The PHIT Act, eliminated from the "One Big Beautiful Bill" has not resonated with Congress for the last 20 years! It is not necessarily because they do not appreciate the positive benefits of exercise on the debilitating cost of our national health care. It is more likely that they just see the PHIT Act as just another bill that is doomed for failure. Meaning, the passage of the PHIT Act will not move the needle in the continuum for solving our national health care crisis.
Back in February of 2023, I emailed Mike Goscinski, HFA's Vice President of Government Affairs, suggesting we scratch the PHIT Act and develop a different, more pointed plan for our industry, and one that may resonate with Congress. His response? Crickets... not even a return email stating how stupid the idea was. I admit, I did not follow up as I had a feeling the PHIT Act would not pass again upon reintroduction. And, guess what? Bingo! And, here I am re-writing my opinion, but this time to a larger audience. Let's look at the hard statistics as to why the PHIT Act should be scrapped.
According to the Bureau of Labor Statistics, approximately 39% of American workers have access to HSA plans. Of those, around 90% are enrolled but only 75% of these enrollees are contributing. One study concluded that possibly only 10% of the nations' workforce is actually eligible for an HSA (bit.ly/clubinsider167). Important Note: Higher wage earners dominate not only the access to HSAs but also their contributions.
Another large study, updated for 2025, shows that approximately 60% of all health club members earn between $50,000 - $100,000 (that's gross income). After standard IRS deductions, taxable income would lower the majority of these persons to the 12% or less tax bracket. Statistics show most individuals with families earning $75,000 or less either pay no taxes or would be in the 10% tax bracket. So, if 60% of all wage earners pay little or no tax, the PHIT Act (the use of HSA tax exempt dollars) offers no incentive to buy gym memberships, home exercise equipment, baseball bats, etc.
Statista's fitness surveys show that around 40% of fitness members make $100,000+ a year. That means that 40% of the current adult members already have the incomes to afford most any fitness membership today. Common sense says: If people can currently afford a membership, but do not, it is not because they can't use their HSA dollars. It is most likely because they don't value the benefits of exercise.
The Government looks at these HSA numbers (presumably) and figures why should they give up tax dollars to people who can afford a membership, but in addition, why extend possible HSA tax breaks to the 60 million people who have already purchased a membership in the first place? In summary, when the Government takes into consideration that 40% of individuals can afford gym memberships with no subsidies, then factors in the people who do not have access to HSAs, and then considers the number of people in the low or tax-exempt brackets, they see that there is little to no incentive to pass the PHIT Act as written. The passage will not make America healthier.
Questions:
- Could HFA have lost its way? Is it getting too big, too ineffective, almost Government-like (you know celebrating the "almost" but never crossing the finish line)?
- Can HFA not see that this is a flawed bill regardless of its passage?
- Is HFA's prime focus now one of saving the world? It seems that way, with all the world travels and photo ops. Maybe the emphasis should have been spent at home by one of the 500 Most Influential People of 2025, analyzing why the PHIT Act is not the right bill to make America healthier.
- Could HFA be better off as its own entity, saving the world, and the U.S. health and fitness industry start over again with a new association and fresh ideas? Maybe one that is geared, and narrowly focused, on the U.S. market and its peculiarities? Just think, this new association would not even need its own trade show... Members could still go to the HFA Show!
