New Massachusetts Law Creates Wellness Program Tax Incentives for Employers

Employment Attorney Bob SheaBy: Bob Shea

Massachusetts has enacted legislation that, effective January 1, 2013, gives employers an annual tax credit of up to $10,000 for implementing wellness programs for their employees. The wellness program tax credit is part of broader legislation entitled “An Act Improving the Quality of Health Care and Reducing Costs through Increased Transparency.”

The law acknowledges that “wellness programs implemented by business have resulted in both savings to their premiums as well as overall savings to the cost of health care,” and states that the goal of the tax credit “is to provide smaller businesses with an expanded opportunity to implement these programs.” The law offers employers a tax credit of 25% of the costs associated with implementing a wellness program, up to $10,000 per year. Employers can apply the credit to taxes owed to the Commonwealth. Further, employers can carry over and apply to their tax liability in future years any wellness program costs that exceed the $10,000 per year cap. The Massachusetts Department of Public Health will be issuing regulations specifying how employers can ensure that their wellness programs qualify for the tax credit.

For any questions on this topic, please feel free to contact Bob.

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