Feature Article - May/June 2011

A Taxing Situation

The Impact of Legislation & Tax Laws on Incentives

By Rick Dandes

Future Challenges

"Frankly, I think the biggest challenge we in the industry face is the fact that we have very small requests relative to the tax and revenue issues that face Congress," said Canose. "Right now, Congress is dealing with much larger issues. To get the attention of someone who might sponsor a bill like this is difficult because in terms of everything else going on, it is just so small. The good news is, everyone we talk to recognizes that wellness programs are meaningful, so they are paying attention to us and they are looking to find ways to write this into a much larger bill."

There is cause for optimism, Canose contended.

"Look," he said, "following the crash on Wall Street and the huge economic disaster that took place a few years ago, the rhetoric that took place out of Congress and the White House was bad for incentives. People—legislators included, confused incentive programs with what was seen as incentive payments to some of the very highly paid Wall Street executives."

Incentives became a dirty word. Incentives in some legislative quarters were almost seen as bribes. And it took a while to overcome those misconceptions.

"I think we are getting past all that and making good progress," Canose said. "I also think the future is pretty bright, in terms of writing new tax-advantaged legislation. I believe legislators realize that wellness incentives have a real use and are valuable tools for business today."

Delta also believes progress has been made. "I expect we'll be able to move the ball forward with wellness legislation—at least I hope so. I think it will happen," he said.

Once in a while there is a push back, Delta admitted, because labor unions don't really like safety programs for two reasons: They don't like anything that is outside the collective bargaining agreement, and they don't like differentiation among employees, which is what safety programs do. They couch it in terms of 'safety programs don't work,' but there is zero empirical evidence for that because it is just not true. Safety programs do work. And wellness programs work as well.

"I do see the increased use of incentives and see even more use of tax advantaged programs," he said, "because people want to remain safe and companies want their employees to be safe and healthy."