A Wellness Tax Credit Would End The Obesity Epidemic and Create a Boom for Workplace Wellness Providers

What would the bottom line look like if you could write off $20,000 per full time employee who had a body weight and/or Body Fat % in the normal range (Per CDC)? What if individuals could could sell/transfer their tax credits to another organization or person who needed them?

Worldwide Wellness Industry Leadership Potential:
Workplace wellness providers would be BOOMING with new business today if person in the US received this $20,000 annual tax credit (a fully transferable and carry over credit). This is what is needed to end the obesity epidemic, lower corporate health care costs and motivate corporations to employ workplace wellness programs. The Federal Government would not have to spend a dime, it would simply reward companies for lowering their employees health risk.

An Objective Measuring System:
Many have told me that this will never work because; “it’s impossible to objectively measure and accurately report body weight, body fat % and BMI’s.” It’s now 2012 and there are now a number of tech firms like my friend’s company Tactio that can objectively measure and report your weight just by stepping on a scale and pressing a button on your phone. Fascinating, scary and true!

3ed Party Certification: Personal Trainers, Gyms, Chiropractors, Wellness Coaches, Etc.:
What if the wellness tax credit was based on a “notarized certification of normal body fat %” by a wellness professional. Think of it like a tax return, for a small fee, lets say $25, a person could walk into any gym, Weight Watchers location, meet with a personal trainer, wellness coach or the like and have their body fat % officially certified. The independent profession would perform a series of standardized measurements and attest that the person meets the normal weight standard, sort of like a Wellness CPA. Wellness professionals could actually earn a decent living if all their past and current clients came in to have their weight and body fat % professional and officially measured and certified.

An 8% Reduction in Obesity Rates vs. a 30% Increase:
As of last report nearly 70% of the US population has a body weight rating in the Overweight or Obese category. Based on various estimates, if this proposed tax credit were to be made available tomorrow we would see workplace overweight/obesity rates drop by about 8% in 5 years. This is a huge decline as every other estimate has overweight/obesity rates increasing to near 100% by 2030.

We Now Know WHO and HOW MUCH:
According to a 2011 Society of Actuaries (SOA) report companies are wasting spending an extra $270 billion each year on healthcare costs related to overweight and obese workers. For the first time ever we now know the population driving up healthcare cost, and again for the first time the SOA tells us exactly how much extra this population is costing US employers ($270 billion a year). These cost are totally preventable with lifestyle changes that include weight loss. Obesity is associated with 39 million lost work days, 239 million restricted-activity days, 90 million bed days and 63 million physician visits per year, Source: Alere publication.

Wellness Risk Aversion:
I know that many workplace wellness providers are struggling. Even workplace wellness companies that are doing well are still under-performing given the size of the marketplace; an estimated $300 to $600 billion annually (US alone) Source: 2011 Society of Actuaries. The problem is not the wellness service providers. The real challenge is that there is no guaranteed short or long term incentive (or benefits) for a company to employ a wellness program. These days most companies want a 100% guarantee, zero risk, before they invest.

Allow me to explain:

1. The Business Decision: The answer is NO!
Even if a company understands that, their own company, is the cause of employee’s stress, weight gain and illness and thus higher health care costs, it’s unlikely to address the issue by hiring a wellness consulting firm or employing their own wellness program. Many executives believe that the cost to fix the problem will be greater than the return. No executive wants to champion initiatives that may fail and/or “waste” money.

The Zero Risk Solution: If a company knew that it would receive a $20,000 credit for each employee with a normal body weight then it could quickly add up the potential benefits vs. costs. The fully transferable and carry over feature of this credit would allow the company to sell the credit OR apply it in a future year.

2. Employee Turnover:
The average tenure for employees in today’s workforce is just under 3 years. Companies are reluctant to make a long term investment in short term staff.

The Zero Risk Solution: The company would receive the $20,000 credit at the end of its fiscal or calender year, thus the ROI comes in 12 months or less.

3. The ROI Data Does Not Matter:
You can present all the Wellness ROI data available showing a $4 return to every $1 invested and in most cases it will not sway a company to implement a wellness program. The reasons:

a) WE ARE DIFFERENT: Every company believes that their employees and culture are different from the organizations that realizes the 4 to1 ROI.

The Zero Risk Solution: The tax credit is $20,000 per employee with a normal body weight. The ROI depends on the cost to reach this goal. If every employee is already at this normal body weight then the company already knows the amount of this tax offset. Note: The proposed tax does not penalize existing normal body weight employee.

b) WE CAN’T AFFORD IT: “We can’t afford any new investment at this time.” One would think that should be an easy one to overcome but it’s not. My own company’s workplace wellness program MUST be purchased by each employee so that they have “skin in the game”. Thus, there is NO direct cost to the employer. When employers learn this, they then tell me that; “Their employees won’t pay for it”

The Zero Risk Solution: A company can earn $20,000 per employee that can be transfer (sold) if it decides not to use it. I envision that this will create an very active wellness tax credit auction market. Small businesses may have the most to gain in this market by selling their unused credits to large corporations.

c) WE ARE TOO BUSY: “Our people are having to do more with less these days, they just don’t have the time.” The Towers Watson’s Global Workforce Study informs us that as much as 80% of workers report that they are experiencing high levels of stress which is causing illnesses and driving up health care costs. What kind of stress?: Workers feel that their work-life balance has totally eroded and they fear that if that take time off, even to care for a sick loved one, they will lose their job.

The Zero Risk Solution: If a company is able to save or sell $100,000′s of tax credits, then it may make the time for a work place wellness program.

While there are some regulatory issues, GINA, EEO and the like, it seems that none would actually apply if this wellness tax credit was a voluntary, individual credit that could be applied as an offset to corporate taxes. There are a number of other positive benefits to this wellness tax credit proposal including wellness industry development, technology advances and worldwide industry leadership to name a few.

What Can You Do Now:
If you believe that a wellness tax credit is a good idea, then join our Linked in group and we will push this agenda forward.

Please join our group: Workplace Wellness Tax Advocates

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