What Every Tax Department Needs to Know About Wellness Programs

Bloomberg BNA Tax Management Compensation Planning Journal

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.

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What Every Tax Department Needs to Know About Wellness Programs