This month, IHRSA’s Legislative Summit will focus the nation’s attention on fitness industry concerns
By Kristen Walsh
On the eve of IHRSA's first Annual Legislative Summit, which will be held this month in the nation's capital, it seems essential to stop, albeit briefly, and assess where the industry stands with respect to several fitness related policy issues. On May 4-6, club leaders from across the country will gather at IHRSA's Legislative Summit to discuss and promote several important health promotion initiatives. In January, the 108th session of the U.S. Congress convened, and while the economy and homeland security will obviously receive most of its attention, a number of other issues that affect the taxpaying health club industry are also on its agenda. Given the flurry of recent developments—from the publication of the Surgeon General's Call to Action to Prevent and Decrease Overweight and Obesity to the formation of a Congressional Fitness Caucus—IHRSA expects to see an increased emphasis on federal policies that promote physical activity as a way to improve health and curtail chronic disease in our country.
In February, John McCarthy, IHRSA's executive director, and Tom Scanlon, its Washington representative, attended the launch of the Fitness Caucus, a bipartisan group of more than 50 legislators who recognize the importance of regular exercise. Representatives and caucus co-chairs Zach Wamp (R-TN) and Mark Udall (D-CO) hope to enroll a majority of the members of Congress in the group, which would be enormously helpful to IHRSA's exercise-promotion agenda. Some of the key industry-related issues that are now being considered by Congress include the following:
Funds to Promote Physical Activity The current Congress has already passed an omnibus spending bill, which became public law in February, that includes increased appropriations for a number of programs that IHRSA has been championing for several years. Among the allocations are:
$60 million for the Physical Education for Progress (PEP) bill, which provides funding to improve the physical education programs offered in our nation's schools. This amount is a 20ncrease on last year's appropriation of $50 million, which, itself, represented a 1,000ncrease over first-year funding for the project. IHRSA, along with several of its allies—including PE4Life, The American Association of Health, Physical Education and Dance (APHERD), and the Sporting Goods Manufacturers Association (SGMA)—have lobbied aggressively on behalf of PEP for the past three years.
$34 million for the Division of Nutrition and Physical Activity of the Centers for Disease Control, up $6 million over the previous year's appropriation.
$51 million for the Youth Media Campaign, which encourages young Americans to become more physically active. Congress has allocated a total of $245 million for this initiative over the last three years—a major achievement for IHRSA and the other organizations that have lobbied on the program's behalf, particularly given the fact that the White House had sought no funds for the campaign in its initial budget request.
Workforce Health Improvement Provision (WHIP) The current tax law doesn't consider the value of services provided at on-site corporate fitness centers a part of participating employees' taxable income, but, if a company offers or subsidizes such services off-site—e.g., at an IHRSA facility—the employees that use them are obliged to pay income tax on them. This inequity discourages firms from offering health and fitness services off-site, and penalizes employees who make use of them. IHRSA has proposed a remedy, an amendment to the tax code that would allow companies to deduct, as a business expense, the cost of club services or memberships made available to employees; it would also make the value of such benefits nontaxable to workers. In order to prevent any abuse of the provision by tax-exempt organizations, it would not apply to private clubs, or to facilities whose principal business doesn't involve health or recreation. IHRSA's Workforce Health Improvement Provision is expected to be introduced within the next few months.
Discounted Insurance Premiums for Exercisers In February, several U.S. Representatives, including Karen McCarthy (D-MO), filed House Concurrent Resolution 34, which, if adopted, would encourage health insurance companies to promote healthy lifestyles by offering discounted premiums to clients who exercise regularly. The measure is, in essence, an invitation to insurers to join President Bush and Tommy Thompson, the U.S. Secretary of Health and Human Services, in their campaign to stem the nation's growing obesity epidemic by getting Americans to participate more regularly in exercise, particularly strength training. The resolution points out that obesity increases the risk of developing more than 30 diseases, and contends that insurance companies have an obligation to encourage exercise since it reduces expensive healthcare costs.
IHRSA has been working closely with McCarthy and her staff to lobby for House Concurrent Resolution 34, and is hopeful that it will be approved during the first session of the new Congress. The association has not only submitted its own letter endorsing the measure, but has also obtained the support, and signatures, of 20 other organizations, including the YMCA, YWCA, American Heart Association (AHA), and the National Coalition for Promoting Physical Activity (NCPPA).
The Americans With Disabilities Act (ADA) In 1990, Congress passed the Americans With Disabilities ACT (ADA), which requires companies that provide goods and services to the public to take steps to improve physical access and ensure equal opportunities for individuals with disabilities. IHRSA clubs are committed to accommodating the disabled, but are concerned by a growing trend towards litigation that has diverted a significant amount of attention, time, and resources away from club operations, including items having to do with access. There have been numerous, well-documented cases in which unscrupulous lawyers have exploited the ADA by filing frivolous lawsuits.
As a result, IHRSA strongly supports the Americans With Disabilities Notification Act (H.R. 914), introduced in February by Representative Mark Foley (R-FL). This bill would give businesses 90 days to respond, after having been advised about a possible ADA violation, before they could be sued. 'My legislation brings the ADA back to its original purpose—compliance,' explains Foley. 'The hijacking of the ADA must end. Many of these lawyers are making a mockery of the law.' In a related matter, IHRSA has been actively involved with the ADA Access Board as it develops new access guidelines for recreation facilities, and has filed formal comments highlighting its concerns about several proposed rules. The association has also worked with staff members of the small business committees in both the House and Senate in an attempt to generate congressional pressure to influence the new guidelines. Because the discussion about them is now in the process of shifting to the Department of Justice, IHRSA has held meetings with department officials, and will be filing its formal comments on the guidelines later this year.
Estate (or 'Death') Tax IHRSA believes that the estate tax is one of the most destructive taxes in this country, and is committed to working towards its repeal. The tax discourages the owners of family owned ventures from expanding their business, because of fears that, when they die, their children may not be able to pay the tax without jeopardizing the company's or their own personal financial security. Since estate taxes are unconscionably high, many heirs are forced to sell all or part of a business, or to liquidate assets, in order to pay them.
In 2001, President Bush signed into law a tax-relief package -- the Economic Growth and Tax Relief Act -- that provides for a phase-out of the estate tax. However, a sunset stipulation inserted by the Senate (for procedural reasons) mandates that the tax relief provisions be revoked at the end of 2010, which means that the estate tax will have been fully repealed for only one year. The 108th Congress is expected to consider legislation making repeal permanent, and IHRSA will work to marshal grassroots support to help make that happen.
Tax-Exempt Competition Unfair competition from nonprofit fitness-service providers remains one of IHRSA's principal concerns, and the association continues to work on a number of fronts—e.g., with the Internal Revenue Service (IRS) and legislative bodies—to try to fashion a remedy. Given the proliferation of new types of non-taxpaying providers—e.g., hospital- and university-based fitness centers, park and recreation departments, etc.—the threat of such competition has, if anything, increased, and IHRSA, its member clubs, and other concerned associations will strive hard, in the future, to eliminate the tax inequities, putting an end to the danger. A strong, small-business community is vital to a sound economy, and, when nonprofits sell adult fitness services that are already provided by the private sector, they should pay taxes on the revenues generated. (For more information on any of the issues discussed in this article, please contact IHRSA's public policy department at 800-228-4772, 617-951-0055, or gr@ihrsa.org.)
Kristen A. Walsh is IHRSA's public policy manager and can be reached at kma@ihrsa.org.
