Feature Article - May/June 2011

A Taxing Situation

The Impact of Legislation & Tax Laws on Incentives

By Rick Dandes


A Wellness Initiative

More than a year ago, said Karen Renk, executive director of the Naperville, Ill.-based Incentive Marketing Association (IMA), a group of professionals from the Incentive Federation launched an incentive legislative awareness campaign. One of the original goals of the initiative was simply to make Congress aware of the incentive industry and aware of the benefits incentive programs can bring to the bottom line of a business when they are effectively designed and effectively implemented.

"The health care debate ramped up at the same time we were mounting this campaign," Renk said. "It became very clear that we had an opportunity to speak to a specific issue that was high on everyone's interest list, and that was wellness programs."

After all, wellness was part of the original Healthly Workforce Act of 2009.

George Delta was part of that group. "What we have been trying to do all along," said Delta, was "to try to build on the success of the safety and service awards tax advantage in 274(j), by getting Congress to enact legislation having to do with wellness programs."

That goal was all well and good, added Renk, "…but we had a huge initial problem. As with any new initiative, we first had to establish ourselves as experts to the key Congress people whom we had identified as supporters of the wellness act. They didn't know us."

Unfortunately, Renk said, the incentive industry is one of the best-kept secrets in the American economy.

"Once we introduced ourselves," she said, "and came armed with some very compelling information, key studies and testimonials from end user corporations, our reception in the halls of Congress became warmer and warmer. Now, every time we have representatives in Washington carrying this message, I notice that our meetings are longer, and they are more substantial in terms of conversations we are having."

Renk believes there is widespread support among some legislators for wellness incentive legislation. "Obviously the legislative climate right now is focused on budgets. So the timing for what we want done is probably not optimum at this moment. But we know that with any kind of awareness initiative, any kind of effort to see legislation enacted, it is a long process. And we are ready to stay the course."

Renk and other executives visited the legislative staffs of Senators Tom Harkin and Chuck Grassley, of Iowa, Charles Schumer, of New York, and Orin Hatch, of Utah.

"All of them," she said, "have shown interest in health care reform. Their staffs were accommodating and very interested in what we had to say."

One of the things that studies have shown is that the theory of wellness programs may be good, but getting employees to participate, even if it is for their own good, seems to be hit or miss. "More miss than hit," George Delta said.