Wellness programs continue to be popular as employers implement them to spur employees to adopt healthier behaviors. Massachusetts employers that adopt wellness programs for their employees may soon be eligible for a tax credit of up to $10,000 under a law passed in the legislature (S. 2400) on July 31, which Gov. Deval Patrick has indicated he would sign.
If signed into law, the Massachusetts wellness program tax credit would be equal to 25 per cent of the costs associated with implementing a program certified under state law, with a maximum credit of $10,000 per business each year. The Bay State’s Department of Public Health would need to establish eligibility criteria for the wellness programs employed and a reporting mechanism for employers.
Other states have taken similar steps to encourage wellness programs. For example, Indiana‘s Small Employer Qualified Wellness Program Tax Credit provided a state tax credit of 50 percent of the costs of providing a qualified wellness program to employees. However, a moratorium was placed on the credit during the 2011 legislative session. In Ohio, employers can apply for a grant under the Workplace Wellness Grant Program.
Whether or not an incentive is available to maintain a wellness program, employers that adopt them also must consider the legal and compliance risks inherent in many wellness program designs. The law related to wellness programs is significantly underdeveloped and these programs sit at the crossroads of a number of significant laws, such as the Americans with Disabilities Act (ADA), the Employee Retirement Income Security Act (ERISA), the Health Insurance Portability and Accountability Act (HIPAA), the Genetic Information Nondiscrimination Act (GINA), as well as other federal and state laws. Careful design and implementation is critical.