Industry & Regulatory NewsLegislation Proposed to Permit HSAs for Children
The Child Health Savings Account Act of 2022 (H.R. 6507), introduced by Beth Van Duyne (R-TX) in the House of Representatives, would expand HSA contribution eligibility requirements by allowing parents to contribute and deduct up to $3,000 each year to their childrens’ HSAs.
The HSA will be treated as the parent’s HSA until the child reaches age 18. At that time, it would become the child’s HSA. As the bill is currently drafted, any distributions taken out of the HSA before the child’s 18th birthday would be included in the parent’s taxable income. Nonqualified distributions would also be subject to an additional 20 percent penalty tax. Once the child turns 18, distributions would be considered qualified only if they were taken while the child was not a dependent on the parent’s insurance (the child could be treated as the parent’s dependent for certain permitted insurance, but not for the parent’s health plan).
If the child were to become disabled or die, the parent would no longer be able to make contributions, but could roll over any HSA assets to their own IRA or HSA, or to another child’s HSA.
If enacted, this legislation would become effective for tax years beginning after the date of enactment. Any progress of the bill through Congress will be monitored, and details provided as they become available.
Industry & Regulatory NewsLegislation Proposed to Expand Group Health Plan Coverage
The Family Plus Health Care Act of 2022 (H.R. 6508), introduced by Beth Van Duyne (R-TX) in the House of Representatives, aims to expand group health plan coverage by requiring plans to offer participants the option of enrolling their parents in the plan, as long as the parents are not eligible to enroll in either Medicare or Medicaid.
The cost of the parents’ group health plan coverage would be excluded from the gross income of the employee participating in the plan. Self-employed individuals would be allowed to claim a deduction for the amount that they paid to insure their parents.
The term ‘parent’ includes an individual’s biological parent, a stepparent, and a parent by adoption, but does not include a spouse’s parent. If enacted, this legislation would apply to any amounts paid or incurred after the bill’s date of enactment.
Industry & Regulatory NewsWashington Pulse: House Version of "Build Back Better" Act Contains Retirement Plan and Benefits Provisions
On November 19, 2021, the U.S. House of Representatives passed H.R. 5376, the Build Back Better Act ("BBB Act" or "the Act"). Following quickly on the heels of the Infrastructure Investment and Jobs Act, the BBB Act contains several retirement and benefits provisions that may affect financial organizations, service providers, and consumers. This bill has gone through numerous revisions as it made its journey to the House floor for a vote. It will now go to the Senate, which will likely make further revisions. So the Act’s final version—if passed by both the House and Senate—may be different from the current version.
Industry & Regulatory NewsBuild Back Better Bill Passes House, Moves to Senate
Industry & Regulatory NewsWashington Pulse: Infrastructure Act Includes Additional Pension Funding Relief, Disaster Relief Changes, and New Digital Asset Reporting Requirements
The Infrastructure Investment and Jobs Act (the Act), signed by President Biden on November 15, 2021, includes extensions to the single employer pension funding relief originally provided in the American Rescue Plan Act of 2021 (ARPA). Other provisions include modifications to the mandatory 60-day postponement period, which grants relief to taxpayers for certain tax-related acts due to federally declared disasters and new reporting requirements for transactions involving digital assets. The effective dates vary—pension funding relief provisions apply to plan years beginning after December 31, 2021; the disaster relief changes are effective for federally declared disasters that occur after November 15, 2021; and the new reporting requirements for digital assets apply to information reports required to be filed after December 31, 2023.
Industry & Regulatory NewsCommittee Leaders Introduce Retirement Legislation in House
Leadership from the House Committee on Education and Labor and its Subcommittee on Health, Employment, Labor and Pensions have introduced the Retirement Improvement and Savings Enhancement (RISE) Act to expand worker access to a secure retirement.
Industry & Regulatory NewsInfrastructure Bill Heads to President for Signature
The much-anticipated Infrastructure Investment and Jobs Act (the Act) has passed the House of Representatives months after its approval in the Senate. The legislation contains the following noteworthy provisions.
Industry & Regulatory NewsProposed Bill Would Create Portable Retirement Accounts
Representative Jim Himes (D-CT) and Senator Mark Warner (D-VA) have announced legislation to establish universal, portable retirement accounts. The Portable Retirement and Investment Account (PRIA) Act of 2021 would create such accounts for every American at birth, in conjunction with the issuance of a Social Security number.
Industry & Regulatory NewsProposed House Budget Reconciliation Amendment Includes IRA Restrictions
The House Ways and Means Committee has released additional legislative text as part of its tax portion of the anticipated $3.5 trillion budget reconciliation bill. If enacted, the proposal would impose several restrictions on IRAs.
Industry & Regulatory NewsEarly House Budget Reconciliation Text Includes Retirement Reform
The House Ways and Means Committee has released draft legislative text as part of what is currently planned to be a $3.5 trillion tax and spending package. The proposal would require employers without an employer-sponsored retirement plan to automatically enroll their employees in an automatic IRA plan or other retirement arrangement at a rate of at least 6 percent and increasing annually to 10 percent of compensation beginning in 2023. Representative Richard Neal (D-MA) previously proposed such legislation under the Automatic Retirement Plan Act of 2017. The current proposal exempts employers with 5 or fewer employees earning at least $5,000, or those that have been in business for less than 2 years from these requirements. The legislation includes enhancements to credits for small employers to offset plan costs and imposes an excise tax of $10 per participant per day to employers that fail to provide an automatic arrangement.