OPTIONS Act

Key Points

• This bill creates a new type of employer benefit plan called a "qualified benefit options plan." It lets workers choose how to split up their employer's contributions among different tax-free benefits, without being taxed just for having that choice.
• The tax-free benefits workers could choose from include retirement savings (like a 401k), health reimbursement arrangements or health savings accounts, and educational assistance programs. Workers cannot take the money as cash instead.
• The plan must be a written arrangement offered by an employer, and employees choose how to allocate employer contributions among qualified benefits. Importantly, there is no option to take the money as a taxable cash payout.
• The bill includes anti-discrimination rules so that highly paid executives and key employees cannot get special treatment. This mirrors existing rules for cafeteria plans under Section 125 of the tax code.
• If enacted, these new benefit options would apply starting in the 2026 tax year. The bill was introduced with bipartisan support by Rep. Steube and Rep. DelBene and referred to the House Ways and Means Committee.

Votes

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Related Bills

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