Short title

This Act may be cited as the

Promoting Health and Preventing Chronic Disease through Prevention and Wellness Programs for Employees, Communities, and Individuals Act of 2009

Findings

Congress finds the following: (1)Keeping people healthy and preventing disease must be an important part of improving our federal health system. (2)More than 133 million Americans, which accounts for 45 percent of the U.S. population, have at least one chronic condition. (3)With the growth in obesity, especially among younger Americans, the diagnosis of childhood chronic diseases has almost quadrupled over the past four decades and is expected to continue to rise. (4)Chronic diseases are the leading causes of preventable death and disability in the United States, accounting for 7 out of every 10 deaths and killing more than 1,700,000 people in the United States every year. (5)Two-thirds of the increase in health care spending is due to increased prevalence of treated chronic disease. (6)Seventy-five percent of the nation’s aggregate health care spending is on treating patients with chronic disease, and the vast majority of these diseases are preventable. Unfortunately, less than one percent of total health care spending goes toward prevention. (7)According to a recent study, treatment of the seven most common chronic diseases, coupled with productivity losses, cost the U.S. economy more than $1 trillion dollars annually. It has been estimated that modest reductions in unhealthy behaviors could prevent or delay 40 million cases of chronic illness per year. (8)Chronic diseases are burdensome to American businesses. Not only does a sicker American workforce have higher health care costs, but it is also less productive. Chronic illnesses lead to absenteeism and decreased effectiveness while at work due to illness. (9)Prevention not only saves lives, it is highly cost-effective. One study concluded that an investment of $10 per person per year in proven community-based programs to increase physical activity, improve nutrition, and prevent smoking and other tobacco use could save the country more than $16 billion annually within five years. This is a return of $5.60 for every $1 spent.

Tax credit to employers for costs of implementing prevention and wellness programs

(a)

In General

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following:

45R.

Prevention and wellness program credit

(a)

Allowance of credit

(1)

In general

For purposes of section 38, the prevention and wellness credit determined under this section for any taxable year during the credit period with respect to an employer is an amount equal to 50 percent of the costs paid or incurred by the employer in connection with a qualified prevention and wellness during the taxable year. For purposes of the preceding sentence, in the case of any qualified prevention and wellness offered as part of an employer-provided group health plan, including health insurance offered in connection with such plan, only costs attributable to the qualified prevention and wellness and not to the group health plan or health insurance coverage may be taken into account. (2)

Limitation

The amount of credit allowed under paragraph (1) for any taxable year shall not exceed the sum of— (A)the product of $200 and the number of employees of the employer not in excess of 200 employees, plus (B)the product of $100 and the number of employees of the employer in excess of 200 employees. (b)

Qualified prevention and wellness

For purposes of this section— (1)

Qualified prevention and wellness

The term qualified prevention and wellness means a program which— (A)consists of any 3 of the prevention and wellness components described in subsection (c), and (B)which is certified by the Secretary of Health and Human Services, in coordination with the Director of the Center for Disease Control and Prevention, as a qualified prevention and wellness under this section. (2)

Programs must be consistent with research and best practices

(A)

In general

The Secretary of Health and Human Services shall not certify a program as a qualified prevention and wellness unless the program— (i)is consistent with evidence-based research and best practices, as identified by persons with expertise in employer health promotion and prevention and wellnesss, (ii)includes multiple, evidence-based strategies which are based on the existing and emerging research and careful scientific reviews, including the Guide to Community Preventive Services, the Guide to Clinical Preventive Services, and the National Registry for Effective Programs, and (iii)includes strategies which focus on employee populations with a disproportionate burden of health problems. (B)

Periodic updating and review

The Secretary of Health and Human Services shall establish procedures for periodic review of programs under this subsection. Such procedures shall require revisions of programs if necessary to ensure compliance with the requirements of this section and require updating of the programs to the extent the Secretary, in coordination with the Director of the Centers for Disease Control and Prevention, determines necessary to reflect new scientific findings. (3)

Health literacy

The Secretary of Health and Human Services shall, as part of the certification process, encourage employees to make the programs culturally competent and to meet the health literacy needs of the employees covered by the programs. (c)

Prevention and wellness program components

For purposes of this section, the prevention and wellness components described in this subsection are the following: (1)

Health awareness component

A health awareness component which provides for the following: (A)

Health education

The dissemination of health information which addresses the specific needs and health risks of employees. (B)

Health screenings

The opportunity for periodic screenings for health problems and referrals for appropriate follow up measures. (2)

Employee engagement component

An employee engagement component which provides for— (A)the establishment of a committee to actively engage employees in worksite prevention and wellnesss through worksite assessments and program planning, delivery, evaluation, and improvement efforts, and (B)the tracking of employee participation. (3)

Behavioral change component

A behavioral change component which provides for altering employee lifestyles to encourage healthy living through counseling, seminars, on-line programs, or self-help materials which provide technical assistance and problem solving skills. Such component may include programs relating to— (A)tobacco use, (B)obesity, (C)stress management, (D)physical fitness, (E)nutrition, (F)substance abuse, (G)depression, and (H)mental health promotion (including anxiety). (4)

Supportive environment component

A supportive environment component which includes the following: (A)

On-site policies

Policies and services at the worksite which promote a healthy lifestyle, including policies relating to— (i)tobacco use at the worksite, (ii)the nutrition of food available at the worksite through cafeterias and vending options, (iii)minimizing stress and promoting positive mental health in the workplace, (iv)where applicable, accessible and attractive stairs, and (v)the encouragement of physical activity before, during, and after work hours. (B)

Participation incentives

(i)

In general

Qualified incentive benefits for each employee who participates in the health screenings described in paragraph (1)(B) or the behavioral change programs described in paragraph (3). (ii)

Qualified incentive benefit

For purposes of clause (i), the term qualified incentive benefit means any benefit which is approved by the Secretary of Health and Human Services, in coordination with the Director of the Centers for Disease Control and Prevention. (C)

Employee input

The opportunity for employees to participate in the management of any qualified prevention and wellness to which this section applies. (d)

Participation requirement

(1)

In general

No credit shall be allowed under subsection (a) unless the Secretary of Health and Human Services, in coordination with the Director of the Centers for Disease Control and Prevention, certifies, as a part of any certification described in subsection (b), that each prevention and wellness component of the qualified prevention and wellness applies to all qualified employees of the employer. The Secretary of Health and Human Services shall prescribe rules under which an employer shall not be treated as failing to meet the requirements of this subsection merely because the employer provides specialized programs for employees with specific health needs or unusual employment requirements or provides a pilot program to test new wellness strategies. (2)

Qualified employee

For purposes of paragraph (1), the term qualified employee means— (A)for employers offering health insurance coverage, an employee who is eligible for such coverage, or (B)for employers not offering health insurance coverage, an employee who works an average of not less than 25 hours per week during the taxable year. (e)

Other definitions and special rules

For purposes of this section— (1)

Employee and employer

(A)

Partners and partnerships

The term employee includes a partner and the term employer includes a partnership. (B)

Certain rules to apply

Rules similar to the rules of section 52 shall apply. (2)

Certain costs not included

Costs paid or incurred by an employer for food or health insurance shall not be taken into account under subsection (a). (3)

No credit where grant awarded

No credit shall be allowable under subsection (a) with respect to any qualified prevention and wellness of any taxpayer (other than an eligible employer described in subsection (f)(2)(A)) who receives a grant provided by the United States, a State, or a political subdivision of a State for use in connection with such program. The Secretary shall prescribe rules providing for the waiver of this paragraph with respect to any grant which does not constitute a significant portion of the funding for the qualified prevention and wellness. (4)

Credit period

(A)

In general

The term credit period means the period of 10 consecutive taxable years beginning with the taxable year in which the qualified prevention and wellness is first certified under this section. (B)

Special rule for existing programs

In the case of an employer (or predecessor) which operates a prevention and wellness for its employees on the date of the enactment of this section, subparagraph (A) shall be applied by substituting 3 consecutive taxable years for 10 consecutive taxable years. The Secretary shall prescribe rules under which this subsection shall not apply if an employer is required to make substantial modifications in the existing prevention and wellness in order to qualify such program for certification as a qualified prevention and wellness. (C)

Controlled groups

For purposes of this paragraph, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer. (f)

Portion of credit made refundable

(1)

In general

In the case of an eligible employer of an employee, the aggregate credits allowed to a taxpayer under subpart C shall be increased by the lesser of— (A)the credit which would be allowed under this section without regard to this subsection and the limitation under section 38(c), or (B)the amount by which the aggregate amount of credits allowed by this subpart (determined without regard to this subsection) would increase if the limitation imposed by section 38(c) for any taxable year were increased by the amount of employer payroll taxes imposed on the taxpayer during the calendar year in which the taxable year begins.

The amount of the credit allowed under this subsection shall not be treated as a credit allowed under this subpart and shall reduce the amount of the credit otherwise allowable under subsection (a) without regard to section 38(c).

(2)

Eligible employer

For purposes of this subsection, the term eligible employer means an employer which is— (A)a State or political subdivision thereof, the District of Columbia, a possession of the United States, or an agency or instrumentality of any of the foregoing, or (B)any organization described in section 501(c) of the Internal Revenue Code of 1986 which is exempt from taxation under section 501(a) of such Code. (3)

Employer payroll taxes

For purposes of this subsection— (A)

In general

The term employer payroll taxes means the taxes imposed by— (i)section 3111(b), and (ii)sections 3211(a) and 3221(a) (determined at a rate equal to the rate under section 3111(b)). (B)

Special rule

A rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of subparagraph (A). (g)

Termination

This section shall not apply to any amount paid or incurred after December 31, 2017.

(b)

Treatment as general business credit

Subsection (b) of section 38 of the Internal Revenue Code of 1986 (relating to general business credit) is amended by striking plus at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting , plus, and by adding at the end the following:

(36)the prevention and wellness credit determined under section 45R.

(c)

Denial of double benefit

Section 280C of the Internal Revenue Code of 1986 (relating to certain expenses for which credits are allowable) is amended by adding at the end the following new subsection:

(g)

Prevention and wellness program credit

(1)

In general

No deduction shall be allowed for that portion of the costs paid or incurred for a qualified prevention and wellness (within the meaning of section 45R) allowable as a deduction for the taxable year which is equal to the amount of the credit allowable for the taxable year under section 45R. (2)

Similar rule where taxpayer capitalizes rather than deducts expenses

If— (A)the amount of the credit determined for the taxable year under section 45R, exceeds (B)the amount allowable as a deduction for such taxable year for a qualified prevention and wellness,

the amount chargeable to capital account for the taxable year for such expenses shall be reduced by the amount of such excess.

(3)

Controlled groups

In the case of a corporation which is a member of a controlled group of corporations (within the meaning of section 41(f)(5)) or a trade or business which is treated as being under common control with other trades or business (within the meaning of section 41(f)(1)(B)), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subparagraphs (A) and (B) of section 41(f)(1).

(d)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

Sec. 45R. Prevention and wellness program credit.

(e)

Effective Date

The amendments made by this section shall apply to taxable years beginning after December 31, 2009. (f)

Outreach

(1)

In general

The Secretary of the Treasury, in conjunction with the Director of the Centers for Disease Control and members of the business community, shall institute an outreach program to inform businesses about the availability of the prevention and wellness credit under section 45R of the Internal Revenue Code of 1986 as well as to educate businesses on how to develop programs according to recognized and promising practices and on how to measure the success of implemented programs. (2)

Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out the outreach program described in paragraph (1).

Grants to increase physical activity and emotional wellness, improve nutrition, and promote healthy eating behaviors

Part Q of title III of the Public Health Service Act (42 U.S.C. 280h et seq.) is amended by striking section 399W and inserting the following:

399W.

Grants to increase physical activity and emotional wellness, improve nutrition, and promote healthy eating behaviors and healthy living

(a)

Establishment

(1)

In general

The Secretary, acting through the Director of the Centers for Disease Control and Prevention and in coordination with the Administrator of the Health Resources and Services Administration, the Director of the Indian Health Service, the Secretary of Education, the Secretary of Agriculture, the Secretary of the Interior, the Director of the National Institutes of Health, the Director of the Office of Women’s Health, and the heads of other appropriate agencies, shall award competitive grants to eligible entities to plan and implement prevention and wellness programs that promote health and wellness and prevent chronic disease. Such grants may be awarded to target at-risk populations including youth, health disparity populations (as defined in section 485E(d)), and the underserved. (2)

Term

The Secretary shall award grants under this subsection for a period not to exceed 4 years. (b)

Award of Grants

An eligible entity desiring a grant under this section shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require, including— (1)a plan describing a comprehensive program of approaches to encourage healthy living, emotional wellness, healthy eating behaviors, and healthy levels of physical activity; (2)the manner in which the eligible entity will coordinate with appropriate State and local authorities and community-based organizations, including but not limited to— (A)State and local educational agencies; (B)departments of health; (C)State directors of programs under section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786); and (D)community-based organizations serving youth; and (3)the manner in which the applicant will evaluate the effectiveness of the program carried out under this section. (c)

Coordination

In awarding grants under this section, the Secretary shall ensure that the proposed programs show a history of addressing these issues, have program evaluations that show success, and are coordinated in substance and format with programs currently funded through other Federal agencies and operating within the community. (d)

Eligible Entity

In this section, the term eligible entity means— (1)a city, county, tribe, territory, or State; (2)a State educational agency; (3)a tribal educational agency; (4)a local educational agency; (5)a federally qualified health center (as defined in section 1861(aa)(4) of the Social Security Act); (6)a rural health clinic; (7)a health department; (8)an Indian Health Service hospital or clinic; (9)an Indian tribal health facility; (10)an urban Indian facility; (11)any health provider; (12)an accredited university or college; (13)a youth serving organization; (14)a community-based organization; or (15)any other entity determined appropriate by the Secretary. (e)

Use of Funds

An eligible entity that receives a grant under this section shall use the funds made available through the grant to plan and implement prevention and wellness programs that promote health and wellness and prevent chronic disease. (f)

Matching Funds

In awarding grants under subsection (a), the Secretary may give priority to eligible entities who provide matching contributions. Such non-Federal contributions may be cash or in-kind, fairly evaluated, including plant, equipment, training, curriculum, or a preexisting evaluation framework. (g)

Technical Assistance

The Secretary may set aside an amount not to exceed 10 percent of the total amount appropriated for a fiscal year under subsection (j) to permit the Director of the Centers for Disease Control and Prevention to provide grantees with technical support in the development, implementation, and evaluation of prevention and wellness programs under this section and to disseminate information about effective strategies and interventions in promoting health and wellness and preventing chronic disease. (h)

Limitation on Administrative Costs

An eligible entity awarded a grant under this section may not use more than 10 percent of funds awarded under such grant for administrative expenses. (i)

Report

Not later than 6 years after the date of enactment of this section the Director of the Centers for Disease Control and Prevention shall review the results of the grants awarded under this section and other related research and identify prevention and wellness programs that have demonstrated effectiveness in promoting health and wellness and preventing chronic disease. Such review shall include an identification of model curricula, best practices, and lessons learned, as well as recommendations for next steps to promote health and wellness and prevent chronic disease. Information derived from such review, including model prevention and wellness program curricula, shall be disseminated to the public. (j)

Definition

In this section, the term prevention and wellness program means a program that consists of a combination of activities that are designed to increase awareness, assess risks, educate, and promote voluntary behavior change to improve the health of an individual, modify his or her consumer health behavior, enhance his or her personal well-being and productivity, and prevent illness and injury. (k)

Authorization of Appropriations

There are authorized to be appropriated to carry out this section, $60,000,000 for fiscal year 2010, and such sums as may be necessary for each of fiscal years 2011 through 2014.

Prevention and wellness programs for individuals and families

(a)

In general

The Secretary of Health and Human Services shall encourage States to work with insurance companies on ways to promote and incentivize the participation of individuals and families in prevention and wellness programs, such as through insurance premium reductions. (b)

Definition

Recognizing for wellness programs under group health plans

(a)

Public Health Service Act

Section 2702 of the Public Health Service Act (42 U.S.C. 300gg–1) is amended— (1)in subsection (b), by adding at the end the following new paragraph:

(4)

Treatment of wellness programs

Paragraph (1) shall not be construed as permitting variation of premiums based on adherence to or participation in reasonably designed programs of health promotion and disease prevention, if such programs exist and a group health plan (or health insurance coverage offered in connection with such a plan) may establish premium discounts or rebates for modifying otherwise applicable copayments or deductibles in return for adherence to or participation in such programs.

; and

(2)by adding at the end the following new subsection:

(g)

Programs of health promotion or disease prevention

(1)

General provisions

(A)

General rule

For purposes of this section, a program of health promotion or disease prevention (referred to in this subsection as a wellness program) shall be a program that is designed to promote health or prevent disease that meets the applicable requirements of this subsection. (B)

No conditions based on health status factor

If none of the conditions for obtaining a premium discount or rebate or other reward for participation in a wellness program is based on an individual satisfying a standard that is related to a health status factor, such wellness program shall not violate this section if participation in the program is made available to all similarly situated individuals and the requirements of paragraph (2) are complied with. (C)

Conditions based on health status factor

If any of the conditions for obtaining a premium discount or rebate or other reward for participation in a wellness program is based on an individual satisfying a standard that is related to a health status factor, such wellness program shall not violate this section if the requirements of paragraph (3) are complied with. (2)

Wellness programs not subject to requirements

If none of the conditions for obtaining a premium discount or rebate or other reward under a wellness program as described in paragraph (1)(B) are based on an individual satisfying a standard that is related to a health status factor (or if such a wellness program does not provide such a reward), the wellness program shall not violate this section if participation in the program is made available to all similarly situated individuals. The following programs shall not have to comply with the requirements of paragraph (3) if participation in the program is made available to all similarly situated individuals: (A)A program that reimburses all or part of the cost for memberships in a fitness center. (B)A diagnostic testing program that provides a reward for participation and does not base any part of the reward on outcomes. (C)A program that encourages preventive care related to a health condition through the waiver of the copayment or deductible requirement under an individual or group health plan for the costs of certain items or services related to a health condition (such as prenatal care or well-baby visits). (D)A program that reimburses individuals for the costs of smoking cessation programs without regard to whether the individual quits smoking. (E)A program that provides a reward to individuals for attending a periodic health education seminar. (3)

Wellness programs subject to requirements

If any of the conditions for obtaining a premium discount, rebate, or reward under a wellness program as described in paragraph (1)(C) is based on an individual satisfying a standard that is related to a health status factor, the wellness program shall not violate this section if the following requirements are complied with: (A)The reward for the wellness program, together with the reward for other wellness programs with respect to the plan that requires satisfaction of a standard related to a health status factor, shall not exceed 30 percent of the cost of employee-only coverage under the plan. If, in addition to employees or individuals, any class of dependents (such as spouses or spouses and dependent children) may participate fully in the wellness program, such reward shall not exceed 30 percent of the cost of the coverage in which an employee or individual and any dependents are enrolled. For purposes of this paragraph, the cost of coverage shall be determined based on the total amount of employer and employee contributions for the benefit package under which the employee is (or the employee and any dependents are) receiving coverage. A reward may be in the form of a discount or rebate of a premium or contribution, a waiver of all or part of a cost-sharing mechanism (such as deductibles, copayments, or coinsurance), the absence of a surcharge, or the value of a benefit that would otherwise not be provided under the plan. The Secretaries of Labor, Health and Human Services, and the Treasury may increase the reward available under this subparagraph to up to 50 percent of the cost of coverage if the Secretaries determine that such an increase is appropriate. (B)The wellness program shall be reasonably designed to promote health or prevent disease. A program complies with the preceding sentence if the program has a reasonable chance of improving the health of, or preventing disease in, participating individuals and it is not overly burdensome, is not a subterfuge for discriminating based on a health status factor, and is not highly suspect in the method chosen to promote health or prevent disease. The plan or issuer shall evaluate the program’s reasonableness at least once per year. (C)The plan shall give individuals eligible for the program the opportunity to qualify for the reward under the program at least once each year. (D)The full reward under the wellness program shall be made available to all similarly situated individuals. For such purpose, among other things: (i)The reward is not available to all similarly situated individuals for a period unless the wellness program allows— (I)for a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is unreasonably difficult due to a medical condition to satisfy the otherwise applicable standard; and (II)for a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is medically inadvisable to attempt to satisfy the otherwise applicable standard. (ii)If reasonable under the circumstances, the plan or issuer may seek verification, such as a statement from an individual’s physician, that a health status factor makes it unreasonably difficult or medically inadvisable for the individual to satisfy or attempt to satisfy the otherwise applicable standard. (E)The plan or issuer involved shall disclose in all plan materials describing the terms of the wellness program the availability of a reasonable alternative standard (or the possibility of waiver of the otherwise applicable standard) required under subparagraph (D). If plan materials disclose that such a program is available, without describing its terms, the disclosure under this subparagraph shall not be required. (4)

Existing programs

Nothing in this section shall prohibit a program of health promotion or disease prevention that was established prior to the date of enactment of this subsection and applied with all applicable regulations, and that is operating on such date, from continuing to be carried out for as long as such regulations remain in effect. (5)

Regulations

Nothing in this section shall be construed as prohibiting the Secretaries of Labor, Health and Human Services, or the Treasury from promulgating regulations in connection with this section.

(b)

Employee Retirement Income Security Act of 1974

Section 702 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1182) is amended— (1)in subsection (b), by adding at the end the following new paragraph:

(4)

Treatment of wellness programs

; and

(2)by adding at the end the following new subsection:

(g)

Programs of health promotion or disease prevention

(1)

General provisions

(A)

General rule

No conditions based on health status factor

Conditions based on health status factor

Wellness programs not subject to requirements

Wellness programs subject to requirements

Existing programs

Regulations

Nothing in this section shall be construed as prohibiting the Secretaries of Labor, Health and Human Services, or the Treasury from promulgating regulations in connection with this section.

(c)

Effective date

The amendments made by this section shall apply to plan years occurring on or after the date of the enactment of this Act.