Smart Benefits: New Wellness Tax Credits for MA Employers

Monday, June 17, 2013

Amy Gallagher, GoLocalWorcester Business/Health Expert

Massachusetts employers who invest in new wellness programs for their employees may now qualify for a tax credit of up to 25%, or a maximum of $10,000 per year of the investment to implement a certified program.

The Massachusetts Wellness Tax Credit is a state program available to Massachusetts businesses that employ 200 or less employees. But employers will need to act fast because funds are expected to be in high demand and the Massachusetts legislature has placed a $15 million per year limit on the total amount of wellness tax credits to be issued. And funds will be allotted on the order of approval of wellness plan certification.

Eligibility Criteria

Employers will need to complete the application form before December 31, 2013, to be considered. They must also meet certain eligibility requirements, including:

Offer health benefits to employees
Have a majority of the employees working in Massachusetts
Have no willful or repeat OSHA violations in the past five years
Meet all other requirements set forth in the final regulations

Employers will also need to demonstrate they’re serious about their wellness programs and show detailed implementation plans to qualify.

Twelve Other Requirements Count

In addition to the requirements above, the employer must already be certified and receive a Seal of Approval from the Massachusetts Department of Public Health (DPH) prior to filing for a wellness tax credit. To obtain DPH approval, a wellness program must include:

1. Budgets that allocate a salary, or a portion thereof, for a person(s) to oversee the entire program, which includes wellness committee oversight and managing and implementing the program. This person’s responsibilities must be included in a job description.

2. Awareness and education program costs

3. Vendor costs related to health risk assessments, training, education or behavioral health interventions directly related to employee health risks

4. Behavior change program costs

5. Worksite adaptation costs that improve healthy lifestyles

6. Incentives for employees to participate in wellness program activities

7. Paid work time for health screenings, wellness visits, or necessary physician visits because of illness

8. Costs associated with implementing value-based benefits (reduced copays or premium differentials for adherence to evidence based guidelines for members with chronic conditions)

9. Costs associated with injury prevention

10. Training costs

11. Data collection costs

12. Evaluation costs

Six ways to Certify Wellness

That’s not all. There are separate criteria for wellness certification as well. The programs must include:

A designated wellness champion
Formal employee communications to promote the program
Employees must be made aware of their individual health risks
Demonstrated data collection on employee health interests
Prioritization of employee health issues
Program development that reflects the above criteria

And, employers must prove that at least 33% of employees are participating in at least one activity offered through the wellness program.

More Information

For more information, employers should refer to the Program Guidance for Obtaining a Wellness Tax Credit. To read the final regulations, visit www.mass.gov/eohhs/gov/laws-regs/dph/proposed-regulations/wellness-tax-credit-incentive.html.

With this tax credit, employers must meet a lot of requirements, but for those who are serious about helping their employees, it means help is on the way. Let’s hope Rhode Island follows Massachusetts’ lead.

Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.

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