WASHINGTON, D.C.--This week, members of Congress introduced a bill in both the House and the Senate that could allow favorable tax treatment of health club memberships as an employee benefit. The bill, called the Workforce Health Improvement Program (WHIP) Act, was introduced in the House by Rep. Zach Wamp (R-TN) and Rep Mark Udall (D-CO) as H.R. 1634. In the Senate, Sen. John Cornyn (R-TX) and Sen. Tom Harkin (D-IA) introduced the legislation, S. 772.
The WHIP act would reaffirm an employer's right to deduct the cost of subsidizing or providing off-site health club benefits to their workers, according to John McCarthy, executive director of the International Health, Racquet and Sportsclub Association (IHRSA), which has been lobbying for the legislation. In addition, this measure would exclude the wellness benefit from being considered additional taxable income for employees. Current law permits businesses to deduct the cost of on-site workout facilities, but when a business needs to outsource this health benefit, 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 IRS rules. Since many employers do not have the resources or office space to offer on-site exercise rooms and fitness programs, the WHIP Act makes it easier for all employers to offer important exercise incentives to their workers without any tax complications, said IHRSA.
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