Senate Bill Would Offer Tax Incentives to Companies That Provide Gym Memberships

April 19, 2005
Companies that pay for or subsidize offsite fitness center memberships for their workers will be able to deduct those costs from their taxes if a bipartisan Senate bill is voted into law.

The Workforce Health Improve Act (WHIP), introduced April 13 by Sen. John Cornyn, R-Texas, and Sen. Tom Harkin, D-Iowa, would allow businesses to deduct the cost of subsidizing or providing offsite fitness center memberships for their employees and would exclude such wellness benefits from being considered taxable income for employees.

Existing tax laws do not allow businesses to deduct the costs of offsite gym memberships for their workers while also requiring such wellness benefits to be considered taxable income for employees.

Cornyn and Harkin first introduced the WHIP Act in 2003. While the original bill never saw the light of day, the bill's sponsors are hopeful that the current focus on overhauling existing tax laws might offer more opportunities for the bill to find a "vehicle," or a larger bill on which the WHIP Act could be attached, according to a spokesperson in Cornyn's press office.

The WHIP Act encourages workers to live healthier lifestyles by making it easier for employers to offer wellness benefits such as gym memberships, according to the bill's sponsors.

"Physical inactivity is a key contributing factor to overweight and obesity and adversely affects workforce productivity," Harkin said. "We quite simply need to make it easier for employers to encourage physical activity. We must give people the tools they need to stay healthy and stay out of the hospital."

While the health problems associated with overweight and obesity have cost businesses more than $15 billion, according to the Centers for Disease Prevention and Control, it is estimated that only 15 percent of adults perform the recommended amount of physical activity. That adds up to a "super-sized health crisis," according to Harkin.

"A physically fit population results in lower health care costs, reduced government spending, fewer illnesses and improved worker productivity," Cornyn said. "It's important to create as many incentives as possible to get Americans up and moving."

The International Health, Racquet and Sportsclub Association, a non-profit trade organization, lauded the bill as a "fundamental step in providing American employers and employees with the tools they need to stop the devastating health trend toward inactivity and obesity in America."

"Current health statistics make clear the need to mobilize on a national level to counter the health crisis of inactivity we now face," said John McCarthy, executive director of the association. "This measure is an essential step in providing real-world incentives necessary to promote physical activity in the workplace."

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