Proposal Offers Selective Payment of Benefits

Representatives Greg Steube (R-FL), and Suzan DelBene (D-WA), have introduced the Optimizing Participant Tax Incentives through Optional Noncash Selections (OPTIONS) Act. The proposal builds off of guidance previously issued by the Internal Revenue Service (IRS) in private letter ruling (PLR) 202434006. Under the PLR, the IRS approved a design choice model of benefit program, allowing participants to choose where employer contributions will be used. Similarly, under a written qualified options benefit plan the bill would allow employees to designate whether they want employer contributions to go to 1) their retirement account, 2) health savings account or health reimbursement account, 3) educational assistance program, or 4) other benefits which are excluded from gross income. Participants may not elect to receive cash or other taxable benefits. The bill has been referred to the House Ways and Means Committee.