Quoting from a statement issued by Aflac, 9 May 2016:
“Aflac has been approached by companies such as Cypress, Inspired, Traverse, and Bene-Fit regarding wellness programs that claim to provide tax-free payments to employees who participate in the wellness program. The core elements of the wellness program involve a two-step process:
(1) A salary reduction election by employees through a Code Section 125 cafeteria plan, as payment for the cost of the wellness plan.
(2) A payment from the wellness plan, sometimes through a “benefit bank,” to employees which purportedly is on a tax-free basis.
The program claims the tax savings generated from the wellness plan may then be used to purchase additional benefits, such as the supplemental health benefits offered by Aflac. The Internal Revenue Service (IRS) has indicated the claimed tax advantages aren’t available under the Internal Revenue Code. These programs have also been reviewed by Aflac’s Legal Division and its outside counsel. Federal tax law doesn’t provide an exclusion from taxable income that would permit a tax free reimbursement under the wellness program. Aflac also believes these programs pose compliance problems under the Affordable Care Act, the Employee Retirement Income Security Act of 1974 (ERISA), and other federal laws.”
In other words, Federal tax incentives to encourage people to be healthy don’t exist yet. There are salespeople promising tax breaks that may not be real.