Possible Tax Write-Offs for Businesses Implementing a Wellness Program

Overview

Your business can offer an employee wellness program and receive some tax benefits. Wellness programs focus on prevention of health problems through exercise, lifestyle changes and nutrition counseling. By implementing a qualified and comprehensive wellness program your company can receive all or some of the tax benefits below also depending if you are a Thai or International Company.

Insurance

Some health insurance companies offer coverage for employee wellness programs for an additional premium. If you pay your employee’s premiums or part of the premiums you can write off this expense on your company’s taxes.

Achievement Programs

You can tie some wellness programs to an achievement. For example, you can set a goal of a specific cholesterol count for employees. You can also set weight, lung-capacity or walking-distance goals. You may offer a reward for reaching the goal, such as cash or a reduction in the employee’s share of health insurance payments. Any reward your company pays in a wellness program is tax deductible.

Non- achievement Programs

You can start an employee wellness program that doesn’t require specific achievements by employees. This can be as simple as reimbursing the cost of joining a fitness center or offering a waiver of co-payments for preventive care such as prenatal examinations. These costs are tax deductible as part of your business expenses. Smoking-cessation classes and health education seminars can be deducted, too.

Equipment

Items such as massage chairs can be tax deductible if the wellness coordinator or a physician recommends them. If you can get documentation from a qualified wellness provider that says specific equipment is part of the program, you can write off this expense. Keep all documentation and written recommendations on file in case you have to support your claim for the deduction. The expense for a massage therapist may also be tax deductible if it is recommended by the certified wellness provider.

Tax Credits (Thailand & some US registered Companies)

Thailand and some US Sates offer tax credits to businesses that start an employee wellness program. Please check with us for details.

For US based Companies:

On-Site Wellness Programs: Will They Be Hurt by Health Care Reform?
The health care reform’s effect on employers will vary based on your company’s size, location, existing insurance and wellness plans, and how proactive your company will be to seek out and implement the bill’s benefits of more research, evaluation tools, and technical assistance. Delving deep into the 2,400 document entitled H.R. 3590 the Patient Protection and Affordable Care Act, you can find the following changes which may impact your company’s wellness programs.

How Does Health Care Reform Impact Most Corporate Wellness Programs?

Wellness incentives increase from 20 to 30 percent of the total premium. In 2014, employers can offer bigger incentives for employees’ positive lifestyle practices or participation in health promotion programs, like lunchtime walking or smoking cessation groups. The Kaiser Family Foundation’s 2009 Employer Health Benefits nation-wide survey found that the average 2009 total premium for employer-sponsored health insurance was $13,375 for family coverage. This means that the additional 10 percent incentive increase calculates out to a credit of $1,337 per employee per year. The same survey found the single person coverage average for an employer in 2009 was $4,824, which would translate into a $483 additional tax credit in 2014.

The number of wellness program participants goes up. As outlined in various sections of the health care reform bill, it will result in millions of dollars spent on the development of a national health promotion plan which will include public education about the importance of community and worksite wellness and health promotion programs.

Proving the ROI for worksite wellness programs will get a lot easier. In recent years, many federal departments have implemented a wide variety of their own in-house wellness programs. The reform bill mandates the Department of Health and Human Services to evaluate these federal workforce programs and report to Congress on the successes and failures of the programs and why. The bill’s section 4402 states that the evaluations will include but not be limited to “absenteeism of employees, the productivity of employees, the rate of workplace injury, and the medical costs incurred by employees, and health conditions, including workplace fitness, healthy food and beverages, and incentives in the Federal Employee Health Benefits Program.”

Regular national surveys on best practices for worksite wellness programs.

By 2013, the Department of Health and Human Services will conduct a national worksite health policies and programs survey to assess employer-based health policies and programs. The surveys will then re-occur on a regular, but yet to be determined basis, to measure the efficacy of chronic disease prevention and health promotion programs over time. The report to Congress will include recommendations on how to implement effective employer-based health programs and policies. The surveys are outlined in Sec. 399 MM-1 of the bill.

Vending machines to dispense junk food AND calorie counts. If employees have been resisting efforts to stock healthier items in company vending machines, most vending machine operators will need to place “clear and conspicuous statements” of the calorie count for each food item sold. This change takes effect next year and may make some employees think twice about that yummy looking candy bar. Sec. 4205 holds this information.

How Could the Health care Reform Affect Small Companies’ Wellness Programs?

Small businesses’ tax credits to rise to 35 percent then 50 percent. From now through 2013, eligible small businesses (fewer than 25 employees with average annual wages of $50,000 or less), can receive a tax credit to 35 percent of their contribution if they pay for at least half of their employees’ premiums. In 2014 and 2015, if small businesses buy insurance on the insurance exchanges (which begin in 2014), the tax credit rises to 50 percent. The savings might mean some additional funds available for wellness programs which will reduce premiums over the long term. These changes are detailed in Sec. 1421.

Grant money available for small businesses to implement comprehensive workplace wellness programs. Eligible employers (fewer than 100 employees who work more than 25 hours a week) who do not currently have a wellness program can apply for these grants from a $200 billion, five-year program beginning in 2011. Sec. 1048 details that required program components include the following: 1) screenings and assessments; 2) mechanisms to encourage employee participations; 3) “initiatives to change unhealthy behaviours and lifestyle choices” which would include counselling, seminars, and online programs; 4) improving the workplace environment with polices to encourage healthier lifestyles.

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