WASHINGTON – U.S. Senators Todd Young (R-Ind.) and Cory Booker (D-N.J.) introduced the bipartisanOptimizing Participant Tax Incentives through Optional Noncash Selections (OPTIONS)Act, legislation to give American workers greater flexibility in how they receive employer-provided benefits.
The OPTIONS Act would allow employees to choose how certain employer contributions are allocated among retirement savings, student loan repayment, health savings accounts, and other eligible benefits. The legislation would provide employers with a clear legal framework to offer these options while maintaining existing tax advantages.
“American workers have different financial circumstances, and employer benefits should reflect those differences,”said Senator Young. “Whether an employee needs to prioritize saving for retirement, paying off student loans, or managing health care expenses, our legislation would give workers greater flexibility to put their benefits toward what matters most to them.”
“You can’t build long-term financial security if you can’t afford the present,”said Senator Booker. “Today, too many Americans are struggling just to keep their heads above water, let alone build for the future. Every worker carries a different burden: student debt, rising health care costs, or concerns about having a secure retirement. The bipartisan OPTIONS Act recognizes that the pathway to financial security looks different for every family and gives workers more flexibility to direct their employer-provided benefits where they need them most. At a time when families are facing an affordability crisis, this bill puts the choice back where it belongs: in the hands of the people doing the work. That’s what dignity and economic fairness look like, and I’m proud to fight for it.”
“American workers don’t all face the same financial challenges, so their benefits shouldn’t be one-size-fits-all,” said American Retirement Association (ARA) CEO Brian Graff. “The OPTIONS Act is a smart, forward-looking solution that empowers employees to direct employer contributions where they need them most, whether that’s retirement savings, healthcare, or paying down student debt. ARA applauds Senators Young and Booker for their bipartisan leadership on this important legislation, which strengthens financial security while preserving the integrity of our employer-sponsored system.”
“Today’s workforce spans generations, income levels, and life stages, and employers want the flexibility to meet employees where they are,”said Chatrane Birbal, Senior Vice President of Public Policy and Government Relations at the CHRO Association. “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. We thank Senators Young and Booker for their bipartisan leadership on legislation that helps employers deliver more value from the benefits they already provide.”
“ERIC applauds the introduction of the OPTIONS Act by Senators Young and Booker,”said James Gelfand, President & CEO, The ERISA Industry Committee (ERIC). “Large employers are at the forefront of providing innovative employee benefits, and this bill would empower employees to make decisions improving their own financial wellbeing. Workers stand to benefit from the new flexibility that would be offered by the OPTIONS Act, and we strongly support this bipartisan bill.”
The OPTIONS Act would amend the Internal Revenue Code to establish qualified benefit options plans, allowing employees to allocate eligible contributions toward:
- Retirement savings: Employer contributions to eligible retirement plans, including 401(k) plans.
- Student loan repayment: Employer payments through qualified educational assistance programs.
- Health care expenses: Contributions to health savings accounts (HSAs) and health reimbursement arrangements (HRAs)
- Other eligible benefits: Additional employer-provided benefits that qualify for favorable treatment under federal law.
Companion legislation was introduced in the U.S. House of Representatives by Representatives Greg Steube (R-Fla.-17) and Suzan DelBene (D-Wash.-01).
Bill text is available here.