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Hello Tax Credit: Massachusetts Offers Carrot To Small Employers Considering Adding Wellness Programs

No one can argue with the fact that “wellness is good” for an organization.  I mean, who wouldn't want healthy employees working for them? Think of all the benefits of supporting wellness programs including documented positive changes in employee morale, productivity, recruitment, retention, organizational culture, self-reported behavior changes and reductions in chronic disease, health claims data, disability data, lost work days, employee turnover, and more.  Sounds good, right?

Today, more and more large organizations are looking at strategic health improvement programs to help contain rising healthcare costs.
  Those larger companies usually have more resources at their fingertips to help them get these types of programs off the ground and sustainable over time.  But what about the small employers?  What resources are available to them? Well, if you’re a small employer in the state of Massachusetts and you have not dabbled in the area of health and wellness programs because of tight budgets and feeling like there’s no support out there, you might be interested in knowing about a new tax incentive coming from the state of Massachusetts.

Massachusetts is offering a state tax credit to those small businesses who offer wellness programs to their employees.  This tax credit program is monitored through the Massachusetts Department of Public Health and is part of the Massachusetts General Law Chapter 224:  An Act Improving the Quality of Health Care and Reducing Costs through Increased Transparency, Efficiency and Innovation.

The state will award small businesses (<200 employees) a state tax credit of 25% (or up to $10,000) of the cost of a “certified” wellness program in a taxable year starting in 2013 and lasting through 2017.  The legislature has placed a $15 million per year limit on the total wellness tax credits. Employers can apply for this credit at any point during the 2013-2017 time frame and they could qualify each year so long as their program meets the criteria for a certified program and if they re-apply for the credit.  In 2013, the state is running a pilot program where there has been a state tax credit of 50% set aside for those employer groups who have 100 or fewer employees.

The criteria for which the certification is based comes in two forms: employer criteria and wellness program criteria. Under the employer criteria, the employer must employ 200 or fewer employees with the majority of them working in the state of Massachusetts, they must offer healthcare benefits to their employees, be a partnership, business, trades, professions or a sole proprietorship and be in compliance with legal obligations including, but not limited to Massachusetts General Law (MGL) Chapter 149, and with all applicable labor, licensing and tax laws: MGL c. 149, MGL c. 151, MGL c. 151A, MGL c. 152.

Under the wellness criteria, the program must include an annual budget for wellness expenditures, have a designated wellness champion, have a formal communication campaign announcing the program, have programs that create awareness of employee personal health risks, data collection on employee interests on various health topics and identifying the most important health issues and/or interests of employees, have programs based on that information in the areas of education and awareness, behavioral change opportunities and changes in workplace policies that support a culture of good health and lastly, show a minimum of 1/3 (33%) participation rate in at least one element of their wellness program.

If the employer meets both the employer and wellness program criteria and completes the on-line application, a Seal of Approval with a Certificate number will be issued to them.  They would print that certificate and include it with their income tax return for the year they've applied for.

You can find more information, download the wellness tax credit application and review the model guide by clicking here.

In my opinion, size doesn't matter when it comes to creating a culture of good health within an organization.  Large or small, there is no shortage of resources or lack of creative minds willing and able to help organizations with their health improvement efforts.  No excuses here—if you want to make it happen and if it’s important enough to senior leadership, it will happen and both the employees and the organization itself will benefit greatly!