I

103D CONGRESS

1ST SESSION H. R. 2597

To amend the Internal Revenue Code of 1986 to allow a credit to small

employers for the cost of implementing health promotion and disease

prevention programs for their employees.

IN THE HOUSE OF REPRESENTATIVES

JULY 1, 1993

Mr. MACHTLEY (for himself and Mr. KOPETSKI) introduced the following bill;

which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to allow a

credit to small employers for the cost of implementing

health promotion and disease prevention programs for

their employees.

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 ‘‘Worksite Wellness Act

5 of 1993’’.

6 SEC. 2. STATEMENT OF FINDINGS.

7 The Congress hereby finds that—
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1 (1) more businesses are promoting disease pre2 vention, healthy lifestyles, and good nutrition

3 through wellness programs than did so in the past;

4 (2) businesses can save on insurance premiums

5 and reduce the number of health insurance claims

6 filed by their employees if employees would partici7 pate in a wellness program;

8 (3) wellness programs lead to lower health care

9 costs, reduced absenteeism, increased productivity,

10 and higher morale;

11 (4) one of the Healthy People 2000 national

12 health objectives is to have disease prevention and

13 health promotion programs in at least 85 percent of

14 worksites with 50 or more employees;

15 (5) a recent survey conducted by the Office of

16 Disease Prevention and Health Promotion reported

17 that 81 percent of companies with 50 or more em18 ployees had at least 1 health promotion activity in

19 1992 compared with 66 percent in 1985; and

20 (6) small businesses have less money to devote

21 to employee benefits and therefore shall be given

22 greater incentives to invest in wellness programs for

23 their employees.
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1 SEC. 3. CREDIT FOR EXPENDITURES TO IMPLEMENT

2 HEALTH PROMOTION AND DISEASE REDUC3 TION PROGRAMS.

4 (a) GENERAL RULE.—Subpart D of part IV of sub5 chapter A of chapter 1 of the Internal Revenue Code of

6 1986 (relating to business related credits) is amended by

7 adding at the end thereof the following new section:

8 ‘‘SEC. 45A. EXPENDITURES TO IMPLEMENT WELLNESS PRO9 GRAMS FOR EMPLOYEES.

10 GENERAL RULE.—For purposes of section 38, in the

11 case of an eligible small employer, the amount of the

12 wellness program credit determined under this section for

13 the taxable year is 50 percent of the qualified wellness

14 program expenses paid or incurred by the taxpayer during

15 the taxable year.

16 ‘‘(b) LIMITATION.—The credit determined under sub17 section (a) with respect to any eligible small employer for

18 any taxable year shall not exceed $10,000.

19 ‘‘(c) ELIGIBLE SMALL EMPLOYER.—The term ‘eligi20 ble small employer’ means any employer if—

21 ‘‘(1) either—

22 ‘‘(A) the gross receipts of such employer

23 for the preceding taxable year did not exceed

24 $3,500,000, or

25 ‘‘(B) in the case of any employer to which

26 subparagraph (A) does not apply, such em-
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1 ployer employee not more than 500 full-time

2 employees during the preceding taxable year,

3 and

4 ‘‘(2) such employer elects the application of this

5 section for the taxable year.

6 For purposes of paragraph (1)(B), an employee shall be

7 considered a full-time employee if such employee is em8 ployed at least 30 hours per week for 20 or more calendar

9 weeks in the calendar year.

10 ‘‘(d) QUALIFIED WELLNESS PROGRAM EXPENSES.—

11 For purposes of this section—

12 ‘‘(1) IN GENERAL.—Except as otherwise pro13 vided in this subsection, the term ‘qualified wellness

14 program expenses’ means the expenses paid or in15 curred by the taxpayer in providing services (and

16 other benefits) to employees under a qualified

17 wellness program of the taxpayer.

18 ‘‘(2) DEPRECIATION ALLOWANCES.—For pur19 poses of this subsection, depreciation allowances

20 under section 167 shall be treated as expenses.

21 ‘‘(3) ONLY DOMESTIC EMPLOYMENT QUALI22 FIED.—Amounts may be taken into account under

23 paragraph (1) with respect to any services only if

24 such services are provided in the United States.
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1 ‘‘(e) QUALIFIED WELLNESS PROGRAM.—For pur2 poses of this section, the term ‘qualified wellness program’

3 means any separate written plan of an employer for the

4 exclusive benefit of his employees if—

5 ‘‘(1) such plan provides employees with 1 or

6 more of the following benefits:

7 ‘‘(A) physical fitness or sports programs,

8 ‘‘(B) nutrition or weight control programs,

9 ‘‘(C) programs to reduce use of tobacco,

10 alcohol, or other drugs,

11 ‘‘(D) mental health programs,

12 ‘‘(E) maternal and infant health programs,

13 ‘‘(F) heart disease prevention programs,

14 ‘‘(G) immunization programs, and

15 ‘‘(H) programs for clinical prevention serv16 ices.

17 ‘‘(2) such plan benefits employees who qualify

18 under a classification set up by the employer and

19 found by the Secretary not to be discriminatory in

20 favor of employees who are highly compensated em21 ployees (within the meaning of section 414(q)) or

22 their dependents, and

23 ‘‘(3) such plan does not provide eligible employ24 ees with a choice between benefits under such plan

25 and other remuneration includible in gross income.
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1 ‘‘(f) SPECIAL RULES.—

2 ‘‘(1) APPLICATION OF DISCRIMINATION

3 RULES.—For purposes of subsection (e)(2), there

4 shall be excluded from consideration employees not

5 included in the program who are included in a unit

6 of employees covered by an agreement which the

7 Secretary of Labor finds to be a collective bargain8 ing agreement between employee representatives and

9 1 or more employers.

10 ‘‘(2) CERTAIN BUSINESS PRACTICES.—For pur11 poses of subsection (e)(3), the business practices of

12 the employer (as well as the written plan) shall be

13 taken into account.

14 ‘‘(3) CERTAIN OTHER RULES MADE APPLICA15 BLE.—For purpose of this section, rules similar to

16 the rules of paragraphs (2), (3), (4), (5), and (6) of

17 section 44(d) shall apply.’’

18 (b) CREDIT MADE PART OF GENERAL BUSINESS

19 CREDIT.—Subsection (b) of section 38 of such Code is

20 amended by striking ‘‘plus’’ at the end of paragraph (7),

21 by striking the period at the end of paragraph (8) and

22 inserting ‘‘, plus’’, and by adding at the end thereof the

23 following new paragraph:
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1 ‘‘(9) in the case of an eligible small employer,

2 the wellness program credit determined under sec3 tion 45A(a).’’

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

5 such Code is amended by adding at the end thereof the

6 following new subsection:

7 ‘‘(d) CREDIT FOR WELLNESS PROGRAM EX8 PENSES.—No deduction shall be allowed for that portion

9 of the qualified wellness program expenses (as defined in

10 section 45A(c)) otherwise allowable as a deduction for the

11 taxable year which is equal to the amount of the credit

12 determined for such taxable year under section 45A(a).’’

13 (d) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to taxable years beginning after

15 the date of the enactment of this Act.

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