Health club benefit tax removal considered

Proposed legislation allowing employers to deduct the cost of providing health or fitness club benefits to employees would go a long way in helping improve the health and physical fitness of U.S. workers, according to a panel of workplace and fitness experts who spoke before a House subcommittee July 8.

The House Small Business Committee's subcommittee on tax, finance and exports held a hearing to consider passage of the Workforce Health Improvement Program Act (H.R. 1818). The proposed measure received wholehearted support from the panel of witnesses who claimed H.R. 1818 would be an important first step to promote healthier lifestyles among workers and to help reduce spiraling health care costs.

"Healthy and happy employees make loyal and valuable employees," said Edwin G. Foulke, an employment attorney with the Greenville, S.C., office of the law firm Jackson Lewis LLP and former chair of the U.S. Occupational Safety and Health Review Commission. "Practical benefits such as a fitness center membership as proposed in this act can provide employers and employees with a real incentive to get active and more physically fit, creating a healthier bottom line for everyone."

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Currently, employers can deduct the costs of providing on-site exercise facilities and fitness programs to employees. Since many employers do not have the resources or office space to offer on-site exercise rooms and fitness programs, H.R. 1818 is an attempt to level the "playing field" and provide smaller-sized employers an incentive to offer health and fitness programs to their workers, according to Rep. Pat Toomey, R-Pa., chairman of the subcommittee and chief sponsor of the legislation.

Foulke, who was testifying on behalf of the Society for Human Resource Management, said that the current tax law favors larger companies and penalizes smaller employers that want to give their employees a valuable health benefit.

The proposed measure also would make employer-sponsored memberships to health clubs a tax-free benefit for employees. Under the current tax laws, any employer support to defray the cost of a health club membership is considered taxable income and therefore rejected by many employees.

H.R. 1818 could be voted on by the full Small Business Committee later this fall. However, the measure probably will not pass as a stand-alone bill and instead could be approved if included as an amendment to some other tax or appropriations package, according to sources familiar with the issue.

COPYRIGHT 2004 Society for Human Resource Management
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