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Bipartisan Pair Seeks Tax Credit to Spur Worker 'Wellness' Programs

By Michael Teitelbaum, CQ Staff

July 9, 2007 – Sens. Tom Harkin, D-Iowa, and Gordon H. Smith, R-Ore., introduced legislation Monday that would provide a tax credit to businesses that offer comprehensive wellness programs to their employees.

The programs would be part of insurance plans available to employees on a yearly basis. The bill would provide a tax incentive of up to $200 per employee for the first 200 employees enrolled and $100 for every employee thereafter.

Harkin, chairman of the Labor-Health-Education Appropriations Subcommittee, and Smith, a member of the tax-writing Finance Committee, said the bill's cost has not been calculated yet. However, Harkin said that typically there is $3 to $4 in health care savings for every dollar spent on wellness and prevention programs over a year to 18 months. Harkin said that he hopes to attach the proposal to tax legislation that is likely to move in the fall.

To qualify for the credit, companies would be required to have three of four components in their wellness programs: health education and risk assessments; behavioral change programs that include counseling, seminars or online courses in such topics as nutrition or smoking cessation; incentives to encourage employee participation, such as health insurance premium reductions to participating employees; and a workforce engagement committee to create a wellness program within the company. Businesses could receive the tax credit for 10 years for creating new wellness programs.

Harkin said that while employers are major providers of health insurance benefits, they have not been at the forefront when it comes to wellness programs.

Supporters of the bill include the American Medical Association, U.S. Chamber of Commerce and various public health organizations such as the American Lung Association and American Cancer Society.

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