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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1753 Introduced in Senate (IS)]

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Healthy Workforce Act of 2007''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The United States has more than 12 million employers 
        and approximately 135 million working adults.
            (2) The use of effective worksite policies and programs can 
        reduce health risks and improve the quality of life for the 135 
        million full-time and part-time workers in the United States.
            (3) Workers spend more than one-third of their day on the 
        job and, as a result, employers are in a unique position to 
        promote the health and safety of their employees.
            (4) Chronic diseases such as heart disease, stroke, cancer, 
        obesity, and diabetes are among the most prevalent and costly 
        worker health problems for most employers.
            (5) The use by employers of effective worksite policies and 
        programs can reduce health risks and improve the quality of 
        life for their employees.
            (6) The good health of workers is good for business because 
        healthier workers miss less work, are more productive, and have 
        lower health care costs.

SEC. 3. TAX CREDIT TO EMPLOYERS FOR COSTS OF IMPLEMENTING WELLNESS 
              PROGRAMS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following:

``SEC. 45O. WELLNESS PROGRAM CREDIT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--For purposes of section 38, the wellness 
        program credit determined under this section for any taxable 
        year during the credit period with respect to an employer is an 
        amount equal to 50 percent of the costs paid or incurred by the 
        employer in connection with a qualified wellness program during 
        the taxable year.
            ``(2) Limitation.--The amount of credit allowed under 
        paragraph (1) for any taxable year shall not exceed the sum 
        of--
                    ``(A) the product of $200 and the number of 
                employees of the employer not in excess of 200 
                employees, plus
                    ``(B) the product of $100 and the number of 
                employees of the employer in excess of 200 employees.
    ``(b) Qualified Wellness Program.--For purposes of this section--
            ``(1) Qualified wellness program.--The term `qualified 
        wellness program' means a program which--
                    ``(A) consists of any 3 of the wellness program 
                components described in subsection (c), and
                    ``(B) which is certified by the Secretary of Health 
                and Human Services, in coordination with the Director 
                of the Center for Disease Control and Prevention, as a 
                qualified wellness program under this section.
            ``(2) Programs must be consistent with research and best 
        practices.--
                    ``(A) In general.--The Secretary of Health and 
                Human Services shall not certify a program as a 
                qualified wellness program unless the program--
                            ``(i) is consistent with evidence-based 
                        research and best practices, as identified by 
                        persons with expertise in employer health 
                        promotion and wellness programs,
                            ``(ii) includes multiple, evidence-based 
                        strategies which are based on the existing and 
                        emerging research and careful scientific 
                        reviews, including the Guide to Community 
                        Preventive Services, the Guide to Clinical 
                        Preventive Services, and the National Registry 
                        for Effective Programs, and
                            ``(iii) includes strategies which focus on 
                        employee populations with a disproportionate 
                        burden of health problems.
                    ``(B) Periodic updating and review.--The Secretary 
                of Health and Human Services shall establish procedures 
                for periodic review of programs under this subsection. 
                Such procedures shall require revisions of programs if 
                necessary to ensure compliance with the requirements of 
                this section and require updating of the programs to 
                the extent the Secretary, in coordination with the 
                Director of the Centers for Disease Control and 
                Prevention, determines necessary to reflect new 
                scientific findings.
            ``(3) Health literacy.--The Secretary of Health and Human 
        Services shall, as part of the certification process, encourage 
        employees to make the programs culturally competent and to meet 
        the health literacy needs of the employees covered by the 
        programs.
    ``(c) Wellness Program Components.--For purposes of this section, 
the wellness program components described in this subsection are the 
following:
            ``(1) Health awareness component.--A health awareness 
        component which provides for the following:
                    ``(A) Health education.--The dissemination of 
                health information which addresses the specific needs 
                and health risks of employees.
                    ``(B) Health screenings.--The opportunity for 
                periodic screenings for health problems and referrals 
                for appropriate follow up measures.
            ``(2) Employee engagement component.--An employee 
        engagement component which provides for--
                    ``(A) the establishment of a committee to actively 
                engage employees in worksite wellness programs through 
                worksite assessments and program planning, delivery, 
                evaluation, and improvement efforts, and
                    ``(B) the tracking of employee participation.
            ``(3) Behavioral change component.--A behavioral change 
        component which provides for altering employee lifestyles to 
        encourage healthy living through counseling, seminars, on-line 
        programs, or self-help materials which provide technical 
        assistance and problem solving skills. Such component may 
        include programs relating to--
                    ``(A) tobacco use,
                    ``(B) obesity,
                    ``(C) stress management,
                    ``(D) physical fitness,
                    ``(E) nutrition,
                    ``(F) substance abuse,
                    ``(G) depression, and
                    ``(H) mental health promotion (including anxiety).
            ``(4) Supportive environment component.--A supportive 
        environment component which includes the following:
                    ``(A) On-site policies.--Policies and services at 
                the worksite which promote a healthy lifestyle, 
                including policies relating to--
                            ``(i) tobacco use at the worksite,
                            ``(ii) the nutrition of food available at 
                        the worksite through cafeterias and vending 
                        options,
                            ``(iii) minimizing stress and promoting 
                        positive mental health in the workplace,
                            ``(iv) where applicable, accessible and 
                        attractive stairs, and
                            ``(v) the encouragement of physical 
                        activity before, during, and after work hours.
                    ``(B) Participation incentives.--
                            ``(i) In general.--Qualified incentive 
                        benefits for each employee who participates in 
                        the health screenings described in paragraph 
                        (1)(B) or the behavioral change programs 
                        described in paragraph (3).
                            ``(ii) Qualified incentive benefit.--For 
                        purposes of clause (i), the term `qualified 
                        incentive benefit' means any benefit which is 
                        approved by the Secretary of Health and Human 
                        Services, in coordination with the Director of 
                        the Centers for Disease Control and Prevention. 
                        Such benefit may include an adjustment in 
                        health insurance premiums or co-pays.
                    ``(C) Employee input.--The opportunity for 
                employees to participate in the management of any 
                qualified wellness program to which this section 
                applies.
    ``(d) Participation Requirement.--
            ``(1) In general.--No credit shall be allowed under 
        subsection (a) unless the Secretary of Health and Human 
        Services, in coordination with the Director of the Centers for 
        Disease Control and Prevention, certifies, as a part of any 
        certification described in subsection (b), that each wellness 
        program component of the qualified wellness program applies to 
        all qualified employees of the employer. The Secretary of 
        Health and Human Services shall prescribe rules under which an 
        employer shall not be treated as failing to meet the 
        requirements of this subsection merely because the employer 
        provides specialized programs for employees with specific 
        health needs or unusual employment requirements or provides a 
        pilot program to test new wellness strategies.
            ``(2) Qualified employee.--For purposes of paragraph (1), 
        the term `qualified employee' means an employee who works an 
        average of not less than 25 hours per week during the taxable 
        year.
    ``(e) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Employee and employer.--
                    ``(A) Partners and partnerships.--The term 
                `employee' includes a partner and the term `employer' 
                includes a partnership.
                    ``(B) Certain rules to apply.--Rules similar to the 
                rules of section 52 shall apply.
            ``(2) Certain costs not included.--Costs paid or incurred 
        by an employer for food or health insurance shall not be taken 
        into account under subsection (a).
            ``(3) No credit where grant awarded.--No credit shall be 
        allowable under subsection (a) with respect to any qualified 
        wellness program of any taxpayer (other than an eligible 
        employer described in subsection (f)(2)(A)) who receives a 
        grant provided by the United States, a State, or a political 
        subdivision of a State for use in connection with such program. 
        The Secretary shall prescribe rules providing for the waiver of 
        this paragraph with respect to any grant which does not 
        constitute a significant portion of the funding for the 
        qualified wellness program.
            ``(4) Credit period.--
                    ``(A) In general.--The term `credit period' means 
                the period of 10 consecutive taxable years beginning 
                with the taxable year in which the qualified wellness 
                program is first certified under this section.
                    ``(B) Special rule for existing programs.--In the 
                case of an employer (or predecessor) which operates a 
                wellness program for its employees on the date of the 
                enactment of this section, subparagraph (A) shall be 
                applied by substituting `3 consecutive taxable years' 
                for `10 consecutive taxable years'. The Secretary shall 
                prescribe rules under which this subsection shall not 
                apply if an employer is required to make substantial 
                modifications in the existing wellness program in order 
                to qualify such program for certification as a 
                qualified wellness program.
                    ``(C) Controlled groups.--For purposes of this 
                paragraph, all persons treated as a single employer 
                under subsection (b), (c), (m), or (o) of section 414 
                shall be treated as a single employer.
    ``(f) Portion of Credit Made Refundable.--
            ``(1) In general.--In the case of an eligible employer of 
        an employee, the aggregate credits allowed to a taxpayer under 
        subpart C shall be increased by the lesser of--
                    ``(A) the credit which would be allowed under this 
                section without regard to this subsection and the 
                limitation under section 38(c), or
                    ``(B) the amount by which the aggregate amount of 
                credits allowed by this subpart (determined without 
                regard to this subsection) would increase if the 
                limitation imposed by section 38(c) for any taxable 
                year were increased by the amount of employer payroll 
                taxes imposed on the taxpayer during the calendar year 
                in which the taxable year begins.
        The amount of the credit allowed under this subsection shall 
        not be treated as a credit allowed under this subpart and shall 
        reduce the amount of the credit otherwise allowable under 
        subsection (a) without regard to section 38(c).
            ``(2) Eligible employer.--For purposes of this subsection, 
        the term `eligible employer' means an employer which is--
                    ``(A) a State or political subdivision thereof, the 
                District of Columbia, a possession of the United 
                States, or an agency or instrumentality of any of the 
                foregoing, or
                    ``(B) any organization described in section 501(c) 
                of the Internal Revenue Code of 1986 which is exempt 
                from taxation under section 501(a) of such Code.
            ``(3) Employer payroll taxes.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `employer payroll 
                taxes' means the taxes imposed by--
                            ``(i) section 3111(b), and
                            ``(ii) sections 3211(a) and 3221(a) 
                        (determined at a rate equal to the rate under 
                        section 3111(b)).
                    ``(B) Special rule.--A rule similar to the rule of 
                section 24(d)(2)(C) shall apply for purposes of 
                subparagraph (A).
    ``(g) Termination.--This section shall not apply to any amount paid 
or incurred after December 31, 2017.''.
    (b) Treatment as General Business Credit.--Subsection (b) of 
section 38 of the Internal Revenue Code of 1986 (relating to general 
business credit) is amended by striking ``plus'' at the end of 
paragraph (30), by striking the period at the end of paragraph (31) and 
inserting ``, plus'', and by adding at the end the following:
            ``(32) the wellness program credit determined under section 
        45O.''.
    (c) Denial of Double Benefit.--Section 280C of the Internal Revenue 
Code of 1986 (relating to certain expenses for which credits are 
allowable) is amended by adding at the end the following new 
subsection:
    ``(f) Wellness Program Credit.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the costs paid or incurred for a qualified wellness 
        program (within the meaning of section 45O) allowable as a 
        deduction for the taxable year which is equal to the amount of 
        the credit allowable for the taxable year under section 45O.
            ``(2) Similar rule where taxpayer capitalizes rather than 
        deducts expenses.--If--
                    ``(A) the amount of the credit determined for the 
                taxable year under section 45O, exceeds
                    ``(B) the amount allowable as a deduction for such 
                taxable year for a qualified wellness program,
        the amount chargeable to capital account for the taxable year 
        for such expenses shall be reduced by the amount of such 
        excess.
            ``(3) Controlled groups.--In the case of a corporation 
        which is a member of a controlled group of corporations (within 
        the meaning of section 41(f)(5)) or a trade or business which 
        is treated as being under common control with other trades or 
        business (within the meaning of section 41(f)(1)(B)), this 
        subsection shall be applied under rules prescribed by the 
        Secretary similar to the rules applicable under subparagraphs 
        (A) and (B) of section 41(f)(1).''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

``Sec. 45O. Wellness program credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.
    (f) Outreach.--
            (1) In general.--The Secretary of the Treasury, in 
        conjunction with the Director of the Centers for Disease 
        Control and members of the business community, shall institute 
        an outreach program to inform businesses about the availability 
        of the wellness program credit under section 45O of the 
        Internal Revenue Code of 1986 as well as to educate businesses 
        on how to develop programs according to recognized and 
        promising practices and on how to measure the success of 
        implemented programs.
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary to carry out the 
        outreach program described in paragraph (1).
                                 <all>
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