On July 9, co-sponsors Senators Tom Harkin, D-Iowa, and Sen. Gordon Smith, R-Ore., introduced the Healthy Workforce Act, which would provide a tax credit of up to $200 per employee for the first 200 employees, and up to $100 per employee thereafter, to businesses that offer comprehensive wellness programs.
The bill requires the programs to include components such as health awareness programs and health risk assessments, behavior change programs, meaningful incentives for program participation and an employee committee that tailors programs to meet workforce needs. An employer can receive the tax credit for 10 years after establishing new qualified wellness programs.
Preventable chronic illnesses, such as diabetes and heart disease, affect more than 33 percent of working-age Americans and make up nearly 75 percent of the nation’s total health care costs. Some companies report spending more than 50 percent of their profits to cover health care expenses for their employees.
“I am thrilled to be standing shoulder to shoulder with both the public health community and leaders in business and industry in a united front to tackle the health care crisis in our country,” said Harkin. “The rising cost of health care has taken its toll on individuals, but also on businesses that provide health coverage to their employees - with employer health care costs rising by more than 70 percent since the year 2000. This trend is affecting American companies' ability to remain competitive in our global economy, and we must find a way to turn it around.”
Businesses and Associations Applaud Measure
The Chamber of Commerce issued its approval of the measure in a letter addressed to both Harkin and Smith, applauding the senators' efforts to assist businesses, “most notably small- and mid-sized companies, with the incentives and tools they need to create healthy workplaces.”
“... This bill recognizes the important role that employers play in promoting healthier lifestyles and a more productive workforce,” wrote R. Bruce Josten, the chamber's executive vice president.
According to the Health Fitness Corp., a provider of employee health improvement services to Fortune 500 companies, the health care industry and individual consumers, employers increasingly are finding that getting their employees into a health management program does wonders not only for workers' health, but also for their own bottom line, as it decreases health care costs and boots productivity.
“This is the next important step for employers, who have supported workers through health insurance for decades,” said Jerry V. Noyce, vice chairman of the board of Health Fitness Corp. and a member of the President's Council on Physical Fitness and Sports. “Adoption of work-based health management programs reduces the risk for chronic illness and enhances the quality of life for American workers. This legislation can be an impetus for more employers to adopt these proven programs.”
Wellness Programs Saves Companies Money
Employers are increasingly bearing the costs of diet-related chronic disease and obesity through employer-provided health care plans and indirectly through higher rates of absenteeism. Obesity alone costs employers approximately $33 billion in health care and other indirect costs. According to Harkin, workplace wellness programs are economical, with a rate of return averaging $30-$200 per employee.
“Preventing these chronic diseases and unhealthy lifestyles not only helps individuals live longer and more fulfilling lives, it saves money,” said Harkin. “For example, proactive treatment of hypertension costs about $1,000 per year whereas treatment for a heart attack – which hypertension is often a cause of – costs a minimum of $50,000, not including time off and loss of productivity. It simply makes sense to partner with employers and leverage the place where Americans spend the majority of their waking hours –the workplace.”
Types of employee wellness programs eligible for the tax credit must include three of the following four provisions:
- Health awareness programs that include education and health risk assessment programs.
- Behavioral change programs that encourage employees to lead a healthy lifestyle through counseling, seminars or on-line programs, including classes on nutrition, stress management or smoking cessation.
- A supportive environment to encourage employee participation in the workplace wellness programs, which could include offering a meaningful incentive to participating employees, such as a reduction in health insurance premiums.
- An employee engagement committee, which would tailor the wellness program to the needs of the workforce at a particular company.