Government

Cornyn introduces measure to encourage health in the workforce

Renews effort to provide incentives for employees to improve physical fitness

From the Office of Senator John Cornyn

April 11, 2007

WASHINGTON—U.S. Sen. John Cornyn, Vice Chairman of the Senate Republican Conference, introduced bipartisan legislation March 29 to encourage better, healthier lifestyles in the workforce. The Workforce Health Improvement Program (WHIP) Act will correct an inequity in the tax code, allowing employers to deduct the cost of both on and off-site fitness centers on a pre-tax basis. The bill is co-sponsored by U.S. Sen. Tom Harkin, D-Iowa.

“By promoting physical fitness, the WHIP Act will decrease health care costs, reduce government spending, fight against disease and illnesses and improve productivity in the workplace,” Sen. Cornyn said. “This legislation provides key incentives so Americans can take advantage of fitness opportunities important to prevention and better health. I hope that in this Congress we can work in a particularly strong bipartisan manner to move this bill forward.”

The WHIP Act would correct a current inequity in the tax code so that small businesses and their employees benefit from a deduction of up to $900 for off-site health club costs. Current law permits businesses to deduct the cost of on-site workout facilities, which are provided for the benefit of employees on a pre-tax basis. But if a business wants or needs to outsource these health benefits, they and/or their employees are required to bear the full cost. Employees who receive off-site fitness center subsidies are required to pay income tax on the benefits, and their employers bear the associated administrative costs of complying with the IRS rules.

In addition, the employer’s contribution to the cost of the health club fees would not be taxable income for employees—creating an incentive for more employers to contribute to the health and welfare of their employees.

Sen. Cornyn introduced this legislation in the previous Congress.

Below is the full statement Sen. Cornyn made when he introduced the WHIP Act

Public health experts unanimously agree that people who maintain active and healthy lifestyles dramatically reduce their risk of contracting chronic diseases. And as the government works to reign in the high cost of health care, it is worth talking about what we all can do to help ourselves. As you know, prevention is key, and exercise is a primary component in the prevention of many adverse health conditions that can arise over one’s lifetime. A physically fit population helps to decrease health-care costs, reduce governmental spending, reduce illnesses, and improve worker productivity.

According to the Centers for Disease Control and Prevention (CDC), the economic cost alone to businesses in the form of health insurance and absenteeism is more that $15 billion. Additionally, Medicare and Medicaid programs currently spend $84 billion annually on five major chronic diseases: diabetes, heart disease, depression, cancer, and arthritis.

Reports also show that only about 15 percent of adults perform the recommended amount of physical activity, and 40 percent of adults do not participate in any physical activity. With physical inactivity being a key contributing factor to overweight and obesity, and adversely affecting workforce productivity, we quite simply need to do more to help employers encourage exercise.

Given the tremendous benefits exercise provides, I believe Congress has a duty to create as many incentives as possible to get Americans off the couch, up, and moving.

With this in mind, I am introducing the WHIP Act.

Mr. President, current law already permits businesses to deduct the cost of on-site workout facilities, which are provided for the benefit of employees on a pre-tax basis. But if a business wants or needs to outsource these health benefits, they and/or their employees are required to bear the full cost. In other words, employees who receive off-site fitness center subsidies are required to pay income tax on the benefits, and their employers bear the associated administrative costs of complying with the IRS rules.

The WHIP Act would correct this inequity in the tax code to the benefit of many smaller businesses and their employees. Specifically, it would provide an employer’s right to deduct up to $900 of the cost of providing health club benefits off-site for their employees. In addition, the employer’s contribution to the cost of the health club fees would not be taxable income for employees – creating an incentive for more employers to contribute to the health and welfare of their employees.

The WHIP Act is an important step in reversing the largely preventable health crisis that our country is facing, through the promotion of physical activity and disease prevention. It is a critical component of America ’s health care policy: prevention. It will improve our nation’s quality of life by promoting physical activity and preventing disease. Additionally, it will help relieve pressure on a strained health care system and correct an inequity in the current tax code.

Sen. Cornyn serves on the Armed Services, Judiciary and Budget Committees. In addition, he is Vice Chairman of the Senate Republican Conference and the Senate Select Committee on Ethics. He serves as the top Republican on the Judiciary Committee’s Immigration, Border Security and Refugees subcommittee and the Armed Services Committee’s Airland subcommittee. He served previously as Texas Attorney General, Texas Supreme Court Justice, and Bexar County District Judge.