What is wellness program

Employers offer incentives for employees, like cash, gift cards, gym memberships, medical reimbursements. These are generally taxable income, if not medically necessary for the employee.

Cash rewards or reimbursement of premiums for participating in a wellness program are taxable. They are treated differently from medical insurance. 

See this IRS Chief Counsel Memorandum for an example, and IRS Publication 502 for more information about deductible medical expenses.

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