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Employer Tax Credits Proposed For Wellness in the Workplace

Legislation that would encourage businesses to implement workplace wellness programs that produce results has been introduced by Iowa Democratic Senator Tom Harkin.

Sen. Harkin is co-sponsoring the Healthy Workforce Act with Republican Senator Gordon Smith of Oregon. The proposal would provide tax incentives to businesses, particularly small- and medium-sized employers, that provide opportunities for their employees to lead healthier lives and prevent chronic illnesses.

"The rising cost of healthcare has taken its toll on individuals, but also on businesses that provide health coverage to their employees – with employer healthcare costs rising by more than 70 percent since the year 2000," said Harkin. "This trend is affecting American companies’ ability to remain competitive in our global economy, and we must find a way to turn it around."

Many companies spend more than 50 percent of their profits to cover healthcare expenses for their employees to prevent illnesses such as diabetes and heart disease, which affect more than 33 percent of working-age Americans. Obesity alone costs employers approximately $33 billion in healthcare and other indirect costs.

The Healthy Workforce Act would provide a tax credit of up to $200 per employee for the first 200 employees and up to $100 per employee thereafter, to businesses that offer a comprehensive wellness program.

Eligible Employee Wellness Programs

  • Health awareness programs that include education and health risk assessment programs;

  • Behavioral change programs that encourage employees to lead a healthy lifestyle through counseling, seminars or online programs, including classes on nutrition, stress management or smoking cessation;

  • A supportive environment to encourage employee participation in the workplace wellness programs, which could include offering a meaningful incentive to participating employees such as reduction in health insurance premiums; and

  • An employee engagement committee, which would tailor the wellness program to the needs of the workforce at a particular company.

An employer can receive the tax credit for 10 years after establishing new qualified wellness programs.

Philip Leake, program coordinator at Mercy Preventive Health Center of Mercy General Hospital, is not optimistic about the proposed legislation.

"Congress hasn’t really seen the urgency in passing any kind of healthcare legislation," said Leake. "Unless there is significant movement on healthcare legislation, bills like this nationally will have a hard time."

Leake mentioned that when Harkin presented a similar legislation during the Clinton administration, it didn’t pass.

"California Sen. Lloyd Levine has introduced similar legislation involving credits for health club memberships and associated health promotion activities which is now wrapped up in Gov. Schwarzenegger’s bills to provide healthcare reform," said Leake.

Philip Leake said that Harkin’s bill, if passed, will help small businesses that are already overtaxed and over regulated.

Address: Senator Tom Harkin, Washington Office, 731 Hart Senate Office Building, Washington DC 20510; (202) 224-3254,

Get the news you need on wellness program management when you sign up for a FREE 30-day trial subscription to the Wellness Program Management Advisor. To sign up today, click here.

Source: Wellness Program Management Advisor, July 2007

© 2007 American Business Publishing

Workplace Wellness Case Studies: Tactics To Promote Health and Reduce Risk

This 111-page report looks at what’s working in health plan wellness and health promotion programs — award-winning and unique efforts, best practices, ROI, and lessons learned. Starting with case studies of health improvement innovations in place at three national health plans, this report then delves into two parallel tactics that are gaining ground among employers: pitting departments against each other in a friendly competition for the healthiest workers and rewarding employees for healthy lifestyle choices. Both the game plan for healthy workplace competition and a profusion of winning ideas for incentives are profiled here.

Workplace Wellness Case Studies: Tactics To Promote Health and Reduce Risk is available from the Healthcare Intelligence Network for $189 by visiting our Online Bookstore or by calling toll-free (888) 446-3530.

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IMPORTANT NOTICE: This information is designed to provide accurate and authoritative information on the business of healthcare. It is distributed with the understanding that Healthcare Intelligence Network is not engaged in rendering legal advice. If legal advice is required, the services of a competent professional should be retained.

© Copyright 2012 Healthcare Intelligence Network Call toll-free (888) 446-3530