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Massachusetts health care — wonky, with a healthy dose of reality

Wellness Plan Tax Break Advances

Wellness Plan Tax Break Advances

January 10, 2013

The Public Health Council at the Massachusetts Department of Public Health today voted in favor of an emergency regulation to enact a tax credit incentive for small businesses which create wellness plans for their employees. In encouraging preventative health measures within the workplace, the initiative promises savings to premiums, overall savings in costs, as well as “softer” savings in areas such as motivation and productivity.

The tax credit could cover 25% of the costs of wellness programs for smaller businesses (those with less than 500 employees) with a maximum of $10,000 per tax year. An annual cap of $15 million would be placed on the incentive, and businesses would be granted the tax credit on a first-come, first-serve basis, although a “two-track” system would be implemented to grant preference to businesses with less than 100 employees. The Department of Public Health is granted the ability to certify the programs of individual businesses, a certification dependent on a plan’s fulfillment of certain criteria:

  • Grounding of the wellness program within the workplace
  • Evidence-based activities
  • Alignment with Department of Public Health research
  • Educational and screening components
  • Individualized approach based on health risk assessment of workforce
  • Promotion of both physical and mental health, including behavior change measures, such as assistance with quitting smoking
  • Provision of a healthy working environment
  • Addressing of most prevalent and preventable conditions in respect to the workplace

The incentive program should encourage employers to tailor individualized plans which meet the specific needs of their employees. Employers will be provided with a checklist of suggested ways to fulfill each part of the requirements, and a guidance document should be made available for employers in the coming weeks.

It's not clear how successful the program will be. Indiana is the only other state with a tax incentive, and just 114 business applied for the credit there. Council member Meredith Rosenthal, a Harvard School of Public Health researcher, also noted that there is not strong evidence that employer wellness programs save money.

The Department of Public Health will hold public hearings regarding the initiative in February, and a final vote will be held mid-April.
-Devon Branin