Benefits Notes |

Employee benefits are an important part of every employees' total compensation package. The continuously evolving landscape in the areas of health care reform, retirement plan design, and executive compensation makes it difficult for employee benefits professionals to keep up with relevant developments. The employee benefits attorneys at Stinson Leonard Street provide human resources professionals, plan fiduciaries, actuaries, accountants, and others in the industry with practical and cost-effective assistance as they navigate through the complex laws, regulations and guidance that govern employee benefits plans. This blog highlights key developments in the employee benefits field and items of interest to our clients. Our Bloggers →

Benefits Notes Post

Some Wellness Benefits are Taxable

My colleagues blogged on recent wellness guidance from the Equal Employment Opportunity Commission (EEOC) and the three agencies charged with enforcing the Affordable Care Act (ACA), the Department of Treasury, the Department of Labor, and the Department of Health and Human Services. The guidance from the EEOC reiterated that compliance with HIPAA requirements for wellness programs is not sufficient. Employers must also comply with the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act.

The most recent guidance from the three agencies also mentioned that wellness programs must take into account the tax consequences of the program. The example the regulators used was the practice of subsidizing a health club or gym membership for employees who visit the facilities a minimum number of times during a month. As noted by FAQ XXV, that subsidy is taxable income subject to income tax reporting and withholding on an employee’s Form W-2.

Employers should take this guidance into account in evaluating the costs associated with including such a subsidy in a wellness program.