II 

110TH CONGRESS 

1ST SESSION S. 1753 

To amend the Internal Revenue Code of 1986 to provide a tax credit to 

employers for the costs of implementing wellness programs, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 9, 2007 

Mr. HARKIN (for himself and Mr. SMITH) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a tax credit to employers for the costs of implementing 

wellness programs, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Healthy Workforce Act 

5 of 2007’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


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1 (1) The United States has more than 12 million 

2 employers and approximately 135 million working 

3 adults. 

4 (2) The use of effective worksite policies and 

5 programs can reduce health risks and improve the 

6 quality of life for the 135 million full-time and part7 time workers in the United States. 

8 (3) Workers spend more than one-third of their 

9 day on the job and, as a result, employers are in a 

10 unique position to promote the health and safety of 

11 their employees. 

12 (4) Chronic diseases such as heart disease, 

13 stroke, cancer, obesity, and diabetes are among the 

14 most prevalent and costly worker health problems 

15 for most employers. 

16 (5) The use by employers of effective worksite 

17 policies and programs can reduce health risks and 

18 improve the quality of life for their employees. 

19 (6) The good health of workers is good for busi20 ness because healthier workers miss less work, are 

21 more productive, and have lower health care costs. 

22 SEC. 3. TAX CREDIT TO EMPLOYERS FOR COSTS OF IMPLE23 MENTING WELLNESS PROGRAMS. 

24 (a) IN GENERAL.—Subpart D of part IV of sub25 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 (relating to business related credits) is amended by 

2 adding at the end the following: 

3 ‘‘SEC. 45O. WELLNESS PROGRAM CREDIT. 

4 ‘‘(a) ALLOWANCE OF CREDIT.— 

5 ‘‘(1) IN GENERAL.—For purposes of section 38, 

6 the wellness program credit determined under this 

7 section for any taxable year during the credit period 

8 with respect to an employer is an amount equal to 

9 50 percent of the costs paid or incurred by the em10 ployer in connection with a qualified wellness pro11 gram during the taxable year. 

12 ‘‘(2) LIMITATION.—The amount of credit al13 lowed under paragraph (1) for any taxable year shall 

14 not exceed the sum of— 

15 ‘‘(A) the product of $200 and the number 

16 of employees of the employer not in excess of 

17 200 employees, plus 

18 ‘‘(B) the product of $100 and the number 

19 of employees of the employer in excess of 200 

20 employees. 

21 ‘‘(b) QUALIFIED WELLNESS PROGRAM.—For pur22 poses of this section— 

23 ‘‘(1) QUALIFIED WELLNESS PROGRAM.—The 

24 term ‘qualified wellness program’ means a program 

25 which— 


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1 ‘‘(A) consists of any 3 of the wellness pro2 gram components described in subsection (c), 

3 and 

4 ‘‘(B) which is certified by the Secretary of 

5 Health and Human Services, in coordination 

6 with the Director of the Center for Disease 

7 Control and Prevention, as a qualified wellness 

8 program under this section. 

9 ‘‘(2) PROGRAMS MUST BE CONSISTENT WITH

10 RESEARCH AND BEST PRACTICES.— 

11 ‘‘(A) IN GENERAL.—The Secretary of 

12 Health and Human Services shall not certify a 

13 program as a qualified wellness program unless 

14 the program— 

15 ‘‘(i) is consistent with evidence-based 

16 research and best practices, as identified 

17 by persons with expertise in employer 

18 health promotion and wellness programs, 

19 ‘‘(ii) includes multiple, evidence-based 

20 strategies which are based on the existing 

21 and emerging research and careful sci22 entific reviews, including the Guide to 

23 Community Preventive Services, the Guide 

24 to Clinical Preventive Services, and the 


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1 National Registry for Effective Programs, 

2 and 

3 ‘‘(iii) includes strategies which focus 

4 on employee populations with a dispropor5 tionate burden of health problems. 

6 ‘‘(B) PERIODIC UPDATING AND REVIEW.— 

7 The Secretary of Health and Human Services 

8 shall establish procedures for periodic review of 

9 programs under this subsection. Such proce10 dures shall require revisions of programs if nec11 essary to ensure compliance with the require12 ments of this section and require updating of 

13 the programs to the extent the Secretary, in co14 ordination with the Director of the Centers for 

15 Disease Control and Prevention, determines 

16 necessary to reflect new scientific findings. 

17 ‘‘(3) HEALTH LITERACY.—The Secretary of 

18 Health and Human Services shall, as part of the 

19 certification process, encourage employees to make 

20 the programs culturally competent and to meet the 

21 health literacy needs of the employees covered by the 

22 programs. 

23 ‘‘(c) WELLNESS PROGRAM COMPONENTS.—For pur24 poses of this section, the wellness program components de25 scribed in this subsection are the following: 


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1 ‘‘(1) HEALTH AWARENESS COMPONENT.—A 

2 health awareness component which provides for the 

3 following: 

4 ‘‘(A) HEALTH EDUCATION.—The dissemi5 nation of health information which addresses 

6 the specific needs and health risks of employees. 

7 ‘‘(B) HEALTH SCREENINGS.—The oppor8 tunity for periodic screenings for health prob9 lems and referrals for appropriate follow up 

10 measures. 

11 ‘‘(2) EMPLOYEE ENGAGEMENT COMPONENT.— 

12 An employee engagement component which provides 

13 for— 

14 ‘‘(A) the establishment of a committee to 

15 actively engage employees in worksite wellness 

16 programs through worksite assessments and 

17 program planning, delivery, evaluation, and im18 provement efforts, and 

19 ‘‘(B) the tracking of employee participa20 tion. 

21 ‘‘(3) BEHAVIORAL CHANGE COMPONENT.—A 

22 behavioral change component which provides for al23 tering employee lifestyles to encourage healthy living 

24 through counseling, seminars, on-line programs, or 

25 self-help materials which provide technical assistance 


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1 and problem solving skills. Such component may in2 clude programs relating to— 

3 ‘‘(A) tobacco use, 

4 ‘‘(B) obesity, 

5 ‘‘(C) stress management, 

6 ‘‘(D) physical fitness, 

7 ‘‘(E) nutrition, 

8 ‘‘(F) substance abuse, 

9 ‘‘(G) depression, and 

10 ‘‘(H) mental health promotion (including 

11 anxiety). 

12 ‘‘(4) SUPPORTIVE ENVIRONMENT COMPO13 NENT.—A supportive environment component which 

14 includes the following: 

15 ‘‘(A) ON-SITE POLICIES.—Policies and 

16 services at the worksite which promote a 

17 healthy lifestyle, including policies relating to— 

18 ‘‘(i) tobacco use at the worksite, 

19 ‘‘(ii) the nutrition of food available at 

20 the worksite through cafeterias and vend21 ing options, 

22 ‘‘(iii) minimizing stress and promoting 

23 positive mental health in the workplace, 

24 ‘‘(iv) where applicable, accessible and 

25 attractive stairs, and 


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1 ‘‘(v) the encouragement of physical 

2 activity before, during, and after work 

3 hours. 

4 ‘‘(B) PARTICIPATION INCENTIVES.— 

5 ‘‘(i) IN GENERAL.—Qualified incentive 

6 benefits for each employee who participates 

7 in the health screenings described in para8 graph (1)(B) or the behavioral change pro9 grams described in paragraph (3). 

10 ‘‘(ii) QUALIFIED INCENTIVE BEN11 EFIT.—For purposes of clause (i), the 

12 term ‘qualified incentive benefit’ means 

13 any benefit which is approved by the Sec14 retary of Health and Human Services, in 

15 coordination with the Director of the Cen16 ters for Disease Control and Prevention. 

17 Such benefit may include an adjustment in 

18 health insurance premiums or co-pays. 

19 ‘‘(C) EMPLOYEE INPUT.—The opportunity 

20 for employees to participate in the management 

21 of any qualified wellness program to which this 

22 section applies. 

23 ‘‘(d) PARTICIPATION REQUIREMENT.— 

24 ‘‘(1) IN GENERAL.—No credit shall be allowed 

25 under subsection (a) unless the Secretary of Health 


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1 and Human Services, in coordination with the Direc2 tor of the Centers for Disease Control and Preven3 tion, certifies, as a part of any certification described 

4 in subsection (b), that each wellness program compo5 nent of the qualified wellness program applies to all 

6 qualified employees of the employer. The Secretary 

7 of Health and Human Services shall prescribe rules 

8 under which an employer shall not be treated as fail9 ing to meet the requirements of this subsection 

10 merely because the employer provides specialized 

11 programs for employees with specific health needs or 

12 unusual employment requirements or provides a 

13 pilot program to test new wellness strategies. 

14 ‘‘(2) QUALIFIED EMPLOYEE.—For purposes of 

15 paragraph (1), the term ‘qualified employee’ means 

16 an employee who works an average of not less than 

17 25 hours per week during the taxable year. 

18 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 

19 For purposes of this section— 

20 ‘‘(1) EMPLOYEE AND EMPLOYER.— 

21 ‘‘(A) PARTNERS AND PARTNERSHIPS.— 

22 The term ‘employee’ includes a partner and the 

23 term ‘employer’ includes a partnership. 

24 ‘‘(B) CERTAIN RULES TO APPLY.—Rules 

25 similar to the rules of section 52 shall apply. 


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1 ‘‘(2) CERTAIN COSTS NOT INCLUDED.—Costs 

2 paid or incurred by an employer for food or health 

3 insurance shall not be taken into account under sub4 section (a). 

5 ‘‘(3) NO CREDIT WHERE GRANT AWARDED.— 

6 No credit shall be allowable under subsection (a) 

7 with respect to any qualified wellness program of 

8 any taxpayer (other than an eligible employer de9 scribed in subsection (f)(2)(A)) who receives a grant 

10 provided by the United States, a State, or a political 

11 subdivision of a State for use in connection with 

12 such program. The Secretary shall prescribe rules 

13 providing for the waiver of this paragraph with re14 spect to any grant which does not constitute a sig15 nificant portion of the funding for the qualified 

16 wellness program. 

17 ‘‘(4) CREDIT PERIOD.— 

18 ‘‘(A) IN GENERAL.—The term ‘credit pe19 riod’ means the period of 10 consecutive taxable 

20 years beginning with the taxable year in which 

21 the qualified wellness program is first certified 

22 under this section. 

23 ‘‘(B) SPECIAL RULE FOR EXISTING PRO24 GRAMS.—In the case of an employer (or prede25 cessor) which operates a wellness program for 


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1 its employees on the date of the enactment of 

2 this section, subparagraph (A) shall be applied 

3 by substituting ‘3 consecutive taxable years’ for 

4 ‘10 consecutive taxable years’. The Secretary 

5 shall prescribe rules under which this sub6 section shall not apply if an employer is re7 quired to make substantial modifications in the 

8 existing wellness program in order to qualify 

9 such program for certification as a qualified 

10 wellness program. 

11 ‘‘(C) CONTROLLED GROUPS.—For pur12 poses of this paragraph, all persons treated as 

13 a single employer under subsection (b), (c), 

14 (m), or (o) of section 414 shall be treated as a 

15 single employer. 

16 ‘‘(f) PORTION OF CREDIT MADE REFUNDABLE.— 

17 ‘‘(1) IN GENERAL.—In the case of an eligible 

18 employer of an employee, the aggregate credits al19 lowed to a taxpayer under subpart C shall be in20 creased by the lesser of— 

21 ‘‘(A) the credit which would be allowed 

22 under this section without regard to this sub23 section and the limitation under section 38(c), 

24 or 


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1 ‘‘(B) the amount by which the aggregate 

2 amount of credits allowed by this subpart (de3 termined without regard to this subsection) 

4 would increase if the limitation imposed by sec5 tion 38(c) for any taxable year were increased 

6 by the amount of employer payroll taxes im7 posed on the taxpayer during the calendar year 

8 in which the taxable year begins. 

9 The amount of the credit allowed under this sub10 section shall not be treated as a credit allowed under 

11 this subpart and shall reduce the amount of the 

12 credit otherwise allowable under subsection (a) with13 out regard to section 38(c). 

14 ‘‘(2) ELIGIBLE EMPLOYER.—For purposes of 

15 this subsection, the term ‘eligible employer’ means 

16 an employer which is— 

17 ‘‘(A) a State or political subdivision there18 of, the District of Columbia, a possession of the 

19 United States, or an agency or instrumentality 

20 of any of the foregoing, or 

21 ‘‘(B) any organization described in section 

22 501(c) of the Internal Revenue Code of 1986 

23 which is exempt from taxation under section 

24 501(a) of such Code. 


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1 ‘‘(3) EMPLOYER PAYROLL TAXES.—For pur2 poses of this subsection— 

3 ‘‘(A) IN GENERAL.—The term ‘employer 

4 payroll taxes’ means the taxes imposed by— 

5 ‘‘(i) section 3111(b), and 

6 ‘‘(ii) sections 3211(a) and 3221(a) 

7 (determined at a rate equal to the rate 

8 under section 3111(b)). 

9 ‘‘(B) SPECIAL RULE.—A rule similar to 

10 the rule of section 24(d)(2)(C) shall apply for 

11 purposes of subparagraph (A). 

12 ‘‘(g) TERMINATION.—This section shall not apply to 

13 any amount paid or incurred after December 31, 2017.’’. 

14 (b) TREATMENT AS GENERAL BUSINESS CREDIT.— 

15 Subsection (b) of section 38 of the Internal Revenue Code 

16 of 1986 (relating to general business credit) is amended 

17 by striking ‘‘plus’’ at the end of paragraph (30), by strik18 ing the period at the end of paragraph (31) and inserting 

19 ‘‘, plus’’, and by adding at the end the following: 

20 ‘‘(32) the wellness program credit determined 

21 under section 45O.’’. 

22 (c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 

23 the Internal Revenue Code of 1986 (relating to certain 

24 expenses for which credits are allowable) is amended by 

25 adding at the end the following new subsection: 


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1 ‘‘(f) WELLNESS PROGRAM CREDIT.— 

2 ‘‘(1) IN GENERAL.—No deduction shall be al3 lowed for that portion of the costs paid or incurred 

4 for a qualified wellness program (within the meaning 

5 of section 45O) allowable as a deduction for the tax6 able year which is equal to the amount of the credit 

7 allowable for the taxable year under section 45O. 

8 ‘‘(2) SIMILAR RULE WHERE TAXPAYER CAP9 ITALIZES RATHER THAN DEDUCTS EXPENSES.—If— 

10 ‘‘(A) the amount of the credit determined 

11 for the taxable year under section 45O, exceeds 

12 ‘‘(B) the amount allowable as a deduction 

13 for such taxable year for a qualified wellness 

14 program, 

15 the amount chargeable to capital account for the 

16 taxable year for such expenses shall be reduced by 

17 the amount of such excess. 

18 ‘‘(3) CONTROLLED GROUPS.—In the case of a 

19 corporation which is a member of a controlled group 

20 of corporations (within the meaning of section 

21 41(f)(5)) or a trade or business which is treated as 

22 being under common control with other trades or 

23 business (within the meaning of section 

24 41(f)(1)(B)), this subsection shall be applied under 

25 rules prescribed by the Secretary similar to the rules 


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1 applicable under subparagraphs (A) and (B) of sec2 tion 41(f)(1).’’. 

3 (d) CLERICAL AMENDMENT.—The table of sections 

4 for subpart D of part IV of subchapter A of chapter 1 

5 of the Internal Revenue Code of 1986 is amended by add6 ing at the end the following: 

‘‘Sec. 45O. Wellness program credit.’’. 

7 (e) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to taxable years beginning after 

9 December 31, 2007. 

10 (f) OUTREACH.— 

11 (1) IN GENERAL.—The Secretary of the Treas12 ury, in conjunction with the Director of the Centers 

13 for Disease Control and members of the business 

14 community, shall institute an outreach program to 

15 inform businesses about the availability of the 

16 wellness program credit under section 45O of the In17 ternal Revenue Code of 1986 as well as to educate 

18 businesses on how to develop programs according to 

19 recognized and promising practices and on how to 

20 measure the success of implemented programs. 

21 (2) AUTHORIZATION OF APPROPRIATIONS.— 

22 There are authorized to be appropriated such sums 

23 as are necessary to carry out the outreach program 

24 described in paragraph (1). 

Æ 


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