In this article, Garrett Fenton describes the more common potential tax implications of employer-sponsored wellness programs. Employer-sponsored wellness programs are viewed by many as an effective way to promote a healthy and more productive workforce. The programs can also lower health care costs which can substantially impact the employer's bottom line. As a result, wellness programs have garnered attention and are now facing regulation under the Patient Protection and Affordable Care Act (ACA) and other statutes. "Wellness programs can implicate a complex web of legal and tax issues that, for employers who are not careful, can lead to a variety of potential foot faults," Fenton writes. He explores the various categories of wellness programs, nondiscrimination rules and excise tax penalties, including affordability under the employer shared responsibility (or "pay-or-play") excise tax provisions, income and employment tax issues under the I.R.C., health savings account eligibility, the so-called "Cadillac plan" tax, and how these issues intersect with other ACA developments.
This article also appeared in BNA Pension & Benefits Reporter on December 30, 2014.