SEC. 3. CREDIT FOR EXPENDITURES TO IMPLEMENT
HEALTH PROMOTION AND DISEASE REDUC-
TION PROGRAMS.
(a) GENERAL RULE.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits) is amended by
adding at the end thereof the following new section:
‘‘SEC. 45A. EXPENDITURES TO IMPLEMENT WELLNESS PRO-
GRAMS FOR EMPLOYEES.
GENERAL RULE.—For purposes of section 38, in the
case of an eligible small employer, the amount of the
wellness program credit determined under this section for
the taxable year is 50 percent of the qualified wellness
program expenses paid or incurred by the taxpayer during
the taxable year.
‘‘(b) LIMITATION.—The credit determined under sub-
section (a) with respect to any eligible small employer for
any taxable year shall not exceed $10,000.
‘‘(c) ELIGIBLE SMALL EMPLOYER.—The term ‘eligi-
ble small employer’ means any employer if—
‘‘(1) either—
‘‘(A) the gross receipts of such employer
for the preceding taxable year did not exceed
$3,500,000, or
‘‘(B) in the case of any employer to which
subparagraph (A) does not apply, such em-
ployer employee not more than 500 full-time
employees during the preceding taxable year,
and
‘‘(2) such employer elects the application of this
section for the taxable year.
For purposes of paragraph (1)(B), an employee shall be
considered a full-time employee if such employee is em-
ployed at least 30 hours per week for 20 or more calendar
weeks in the calendar year.
‘‘(d) QUALIFIED WELLNESS PROGRAM EXPENSES.—
For purposes of this section—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, the term ‘qualified wellness
program expenses’ means the expenses paid or in-
curred by the taxpayer in providing services (and
other benefits) to employees under a qualified
wellness program of the taxpayer.
‘‘(2) DEPRECIATION
ALLOWANCES.—For pur-
poses of this subsection, depreciation allowances
under section 167 shall be treated as expenses.
‘‘(3) ONLY
DOMESTIC
EMPLOYMENT
QUALI-
FIED.—Amounts may be taken into account under
paragraph (1) with respect to any services only if
such services are provided in the United States.
‘‘(e) QUALIFIED WELLNESS PROGRAM.—For pur-
poses of this section, the term ‘qualified wellness program’
means any separate written plan of an employer for the
exclusive benefit of his employees if—
‘‘(1) such plan provides employees with 1 or
more of the following benefits:
‘‘(A) physical fitness or sports programs,
‘‘(B) nutrition or weight control programs,
‘‘(C) programs to reduce use of tobacco,
alcohol, or other drugs,
‘‘(D) mental health programs,
‘‘(E) maternal and infant health programs,
‘‘(F) heart disease prevention programs,
‘‘(G) immunization programs, and
‘‘(H) programs for clinical prevention serv-
ices.
‘‘(2) such plan benefits employees who qualify
under a classification set up by the employer and
found by the Secretary not to be discriminatory in
favor of employees who are highly compensated em-
ployees (within the meaning of section 414(q)) or
their dependents, and
‘‘(3) such plan does not provide eligible employ-
ees with a choice between benefits under such plan
and other remuneration includible in gross income.
‘‘(f) SPECIAL RULES.—
‘‘(1) 
APPLICATION
OF
DISCRIMINATION
RULES.—For purposes of subsection (e)(2), there
shall be excluded from consideration employees not
included in the program who are included in a unit
of employees covered by an agreement which the
Secretary of Labor finds to be a collective bargain-
ing agreement between employee representatives and
1 or more employers.
‘‘(2) CERTAIN BUSINESS PRACTICES.—For pur-
poses of subsection (e)(3), the business practices of
the employer (as well as the written plan) shall be
taken into account.
‘‘(3) CERTAIN OTHER RULES MADE APPLICA-
BLE.—For purpose of this section, rules similar to
the rules of paragraphs (2), (3), (4), (5), and (6) of
section 44(d) shall apply.’’
(b) CREDIT MADE PART OF GENERAL BUSINESS
CREDIT.—Subsection (b) of section 38 of such Code is
amended by striking ‘‘plus’’ at the end of paragraph (7),
by striking the period at the end of paragraph (8) and
inserting ‘‘, plus’’, and by adding at the end thereof the
following new paragraph:
‘‘(9) in the case of an eligible small employer,
the wellness program credit determined under sec-
tion 45A(a).’’
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of
such Code is amended by adding at the end thereof the
following new subsection:
‘‘(d) CREDIT
FOR
WELLNESS
PROGRAM
EX-
PENSES.—No deduction shall be allowed for that portion
of the qualified wellness program expenses (as defined in
section 45A(c)) otherwise allowable as a deduction for the
taxable year which is equal to the amount of the credit
determined for such taxable year under section 45A(a).’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
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