Another Reason for Small Biz Wellness
Wellness Tax Credits for Small Biz May Be Coming
Okay, if you’re still on the fence as to whether or not to start a worksite wellness program at your small business, this may help you make a decision. We already know that when your employees’ health-risks increase your costs increase. When your employees’ health-risks decrease, your costs, decrease. Period!
What ever comes out of the current healthcare reform debate, you can bet that wellness and prevention will play a big part of that reform. Implementing a small business wellness program can not only help you control costs, it may even earn you a tax credit in the near future. Let me explain.
Currently, if you already have a wellness program in place, all you get is to deduct it as a regular business expense. Now, the government has issued a proposal that would give businesses a tax credit would be allow for 50 percent of the costs paid by an employer for providing a “qualified wellness program” during a taxable year. View the video.
Under the Healthy Workforce Act, the amount of the credit would be limited to an amount not exceeding $200 for each employee not exceeding 200 employees, plus $100 for each additional employee in excess of 200 employees. Only employees generally working more than 25 hours per week are taken into account.
For purposes of this credit, any amount paid for food or health insurance could not be included as a cost of the wellness program. The credit would not be refundable and would not be paid in advance and would be available for a maximum of five years.
To claim the tax credit for eligible expenditures, an employer would be required to obtain a certification by the Secretary of HHS (in coordination with the Director of the CDC and the Secretary of the Treasury) that its program meets the definition of a qualified wellness program.
In order for a program to be a qualified wellness program under the proposal, all employees would be required to be eligible to participate in the program. Further, under the proposal, a qualified wellness program includes four components:
- health awareness (such as health education, preventive screenings and health risk assessment);
- employee engagement (such as mechanisms to encourage employee participation);
- behavioral change (elements proven to help alter unhealthy lifestyles such as counseling, seminars, on-line programs, self help materials); and a
- supportive environment (such as creating on-site polices encourage healthy lifestyles, eating, physical activity and mental health). For an employer with 500 or more employees, to be a qualified wellness program, a program would be required to include all four components. For an employer with less than 500 employees, to be qualified wellness program, a program would only required to include at least three of the four components.
In addition, to be a qualified wellness program under the proposal, the program would be required to be consistent with evidence-based research and best practices, as determine by the Secretary, such as research and practices described in the Guide to Community Preventive Services and Guide to Clinical Preventive Services and the National Registry for Effective Programs.
Finally, another option would apply all of the criteria described above as well as provide employers with 50 or fewer employees with a credit limited to $400 per employee. This credit option would not have a sunset requirement for those employers, meaning it would be indefinitely.
We will be staying on top of this legislation, so we’ll let you know what happens!
Please be aware that any information on this site is provided to supplement the care provided by your physician. It is neither intended nor implied to be a substitute for professional medical advice. CALL YOUR HEALTHCARE PROVIDER IMMEDIATELY IF YOU THINK YOU MAY HAVE A MEDICAL EMERGENCY. Always seek the advice of your physician or other qualified health provider prior to starting any new treatment or with any questions you may have regarding a medical condition.
[...] As I wrote about earlier, it would have been great if they would have included the Healthy Workforce Act or at least specific provisions from these bill. In the next coming weeks, I’m going to do my best to better explain what these 6 provisions actually mean. [...]