Bipartisan legislation recently introduced in the U.S. Senate would give Americans more flexibility regarding how they receive employer-provided benefits.
The Optimizing Participant Tax Incentives through Optional Noncash Selections (OPTIONS) Act would amend the Internal Revenue Code to establish qualified benefit options plans that allow employees to choose how certain employer contributions are allocated. Under the bill,
employees would be able to allocate eligible contributions to retirement plans, including 401(k) plans; to health savings accounts and health reimbursement arrangements; or to qualified educational assistance programs. Additional employer-provided benefits may qualify for favorable treatment under federal law.
The legislation provides employers with a clear legal framework to offer the options while maintaining existing tax advantages.
U.S. Sens. Cory Booker (D-NJ) and Todd Young (R-IN) introduced the bill. U.S. Reps. Suzan DelBene (D-WA) and Greg Steuben (R-FL) introduced companion legislation in the U.S. House of Representatives.
The bill has the support of the American Retirement Association, the CHRO Association and The ERISA Industry Committee.
“The OPTIONS Act gives employers clear authority to let employees direct their benefit dollars toward what matters most to them, whether that’s saving for retirement, covering health care costs, or paying down student loans,” Chatrane Birbal, CHRO Association, senior vice president of public policy and government relations, said.