A new bipartisan effort led by representatives from Florida and Washington aims to give American workers more control over their workplace benefits, potentially allowing employees to pivot employer contributions away from traditional retirement accounts and toward student loans or healthcare costs.
Representatives Greg Steube (R-Fla.) and Suzan DelBene (D-Wash.) officially introduced the “Optimizing Participant Tax Incentives through Optional Noncash Selections Act”—better known as the OPTIONS Act—on Wednesday.
If passed, the bill would amend the Internal Revenue Code to allow employees to choose how their employer’s “non-elective” contributions are spent across a variety of tax-favored accounts.
Currently, most employer contributions are locked into retirement plans. The OPTIONS Act seeks to clear up IRS-related confusion that has historically prevented companies from offering more flexible benefit menus.
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“American workers deserve more freedom and true financial security when it comes to their benefits,” Rep. Steube said in a statement. “Unfortunately, ongoing confusion and inconsistencies with IRS rules governing employer contributions to benefit plans have shortchanged millions of Americans of potential savings.”
The push for this legislation stems from a 2024 IRS Private Letter Ruling. In that case, the IRS gave a single employer special permission to let workers split their benefits between retirement, Health Savings Accounts (HSAs), Health Reimbursement Accounts (HRAs), and educational assistance. While that was seen as a win for that specific company, other employers have been hesitant to follow suit without a permanent change to the law.
Rep. DelBene emphasized that many younger workers or those with immediate medical needs find traditional retirement-only benefits a poor fit for their current financial situation.
“With many employees wanting to prioritize student loans and health care bills, this legislation would let them direct their employer contributions to these needs,” DelBene said. “This commonsense bipartisan bill would give workers more options while ensuring those focused on retirement can continue to save.”
The bill specifies that while workers can move money between these tax-free benefits, they cannot opt to take the money as cash, which would trigger immediate taxes.
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Industry leaders have also signaled their support for the change. Brian Graff, CEO of the American Retirement Association, noted that a “one-size-fits-all” approach no longer works for a diverse workforce.
“The OPTIONS Act is a smart, forward-looking solution that empowers employees to direct employer contributions where they need them most,” Graff said.
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