Tax Advantages of Implementing a Robust Wellness Program


This article was originally published in the MassMEP Newsletter of March 2016.

The tax season is drawing close to the finish line. With our tax specialist or our accountant, we always try to find opportunities to reduce our taxability and increase our annual tax refund.
One of these tax incentives can be combined with and enhance your employees’ health by implementing a corporate wellness program. Wellness programs include activities such as company-sponsored exercise, weight-loss competitions, educational seminars, tobacco-cessation programs, and health screenings that are designed to help employees eat better, lose weight, and improve their overall physical health.

The Massachusetts Wellness Tax Credit Incentive Program gives small businesses in Massachusetts a state tax credit for having a certified employee wellness program.

Massachusetts businesses that employ 200 or fewer workers may qualify for a tax credit for up to 25% of the cost of implementing a certified wellness program for their employees. The maximum credit for which a business can apply is $10,000 per year. That means that up to $40,000 can be used toward a wellness program by employers.

For instance, a 200 employee company can spend $200 per employee and get a $50 tax credit for each person. This credit is available to sole proprietors, professions, trades, businesses, and partnerships, and must be based in Massachusetts or have employees that conduct business in Massachusetts.

In addition to providing a safe worksite that protects and promotes health, a wellness program is designed to improve the health and overall well-being of individual employees.

Employee wellness programs must:

  • Identify and address employee health needs and health risks
  • Create a work environment that is supportive of employee health and overall well-being
  • Include awareness and health education programs
  • Provide behavioral change programs that support employees as they seek to live healthier lifestyles

If you think that these requirements look complicated to implement or you do not have the appropriate knowledge in your organization, there is yet another option which can be considered: it is the “Working on Wellness Initiative.”

Massachusetts Working on Wellness Initiative
Working on Wellness is a collaboration among the MA Department of Public Health, Health Resources in Action, and Advancing Wellness, with funds provided by the Prevention and Wellness Trust Fund.

All Massachusetts employers are eligible to apply if they meet the following criteria:

  • Offer health insurance benefits to your employees
  • Have a majority (over 50%) of employees working in Massachusetts
  • The company does not currently have a comprehensive wellness program.

A comprehensive wellness program is available to all employees and includes: a plan for the program, assessment of employee needs and interests, awareness and education programs, behavior change programs, and workplace policies.

Being a subsidiary of a larger national company does not exclude a business from applying if it meets all other eligibility criteria. Up to 350 Massachusetts employers will be accepted into the program in three cohorts ending in June 2017.

While all Massachusetts employers can apply, preference will be given to the following types of businesses/organizations:

  • Businesses/organizations that employ 200 or fewer employees
  • Industries that employ low wage workers

Working on Wellness provides training, technical assistance, tools, and resources to Massachusetts employers to assist in the planning and implementation of their wellness program. Working on Wellness will provide employers with guidance on qualifying and applying for the Wellness Tax Credit.

Seed funding ranging from $5,000 to $10,000 will be provided to each worksite. Seed funding will be distributed at two times during the program. The timing is approximately four months and eight months into the program.

Working on Wellness will provide guidance on how the seed funding can be used throughout the program. If organizations do not have the skillset to deliver some health program and interventions, Working on Wellness encourages an organization to look for local resources in its community.

For example, Manufacturing Company X employees wish to quit smoking, and therefore, might go to their local community health center for a tobacco quit program, supplemented by seed funding.

The purpose of seed funding for Working on Wellness is to start a new workplace wellness program or to enhance an existing program.

Other states, such as New Hampshire, Florida, Indiana, and Arizona have also established legislation to financially promote corporate wellness programs.


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