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<p class="MsoNormal"><b><span style="font-size:12.0pt;color:red">NO ACTION REQUIRED – INFORMATION ONLY<o:p></o:p></span></b></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Dear Benefits Administrators, Business Managers, and Superintendents:<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Recently OEBB has received guidance regarding cash incentives or rewards for wellness program participation. The IRS concluded that all cash incentives or rewards paid to employees for participation in an
employer-sponsored wellness program are considered a payment of wages subject to employment taxes. Subsequent advice from the Department of Justice indicated that Oregon PERS taxes must also be applied to cash incentives or rewards.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">As you may know, OEBB began offering a gym reimbursement program called Fitness Rewards beginning October 1, 2015. Because this program is one that uses cash rewards, the gym reimbursement dollars are now
subject to payroll taxes. <b>At this time, no action is required of OEBB-participating employers/entities.</b> This is just information the OEBB Board must consider going forward.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Over the last several weeks, OEBB has been exploring various options for the Fitness Rewards program, including the pros and cons associated with each. The OEBB Board will be discussing the Fitness Rewards
program and possible solutions to ensure compliance with the new IRS regulations at their next Board meeting, scheduled for October 4, 2016.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">At this point, we are not processing any new registration forms for the program. Additionally, we are sending out the attached communication to our current Fitness Rewards members by both email and USPS mail.
These members should receive the email later today and the paper letter within the next week. Once the Board reviews and discusses options at their next Board meeting, we will communicate further information at that time.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">If you have any questions, please contact Member Services at (888) 469-6322 or email
<a href="mailto:oebb.benefits@oregon.gov">oebb.benefits@oregon.gov</a>.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Thank you,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><img border="0" width="203" height="65" id="Picture_x0020_2" src="cid:image001.jpg@01D20825.08649F70"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Linda Freeze<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">OEBB Benefits Manager<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#44546A"><img border="0" width="199" height="75" id="Picture_x0020_1" src="cid:image002.jpg@01D20825.08649F70" alt="cid:image001.jpg@01D10D96.C6B9DCE0"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#44546A"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif"">CONFIDENTIALITY NOTICE<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif"">This email may contain information that is privileged, confidential, or otherwise exempt from disclosure under applicable law. If you are not the addressee or it appears from the context or
otherwise that you have received this email in error, please advise me immediately by reply email, keep the contents confidential, and immediately delete the message and any attachments from your system.</span><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
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