On April 15, House Ways and Means Committee members Reps. Greg Steube (R-Fla.) and Suzan DelBene (D-Wash.) introduced a bill, the Optimizing Participant Tax Incentives Through Optional Noncash Selections (OPTIONS) Act, which would codify and expand the IRS' rulings in a 2024 private letter ruling that Groom Law Group obtained for an employer.  See our prior alert here: https://www.groom.com/resources/irs-ruling-allows-employees-to-choose-between-health-retirement-and-student-loan-benefits/

The OPTIONS Act would add a new Code section 125A, which would create a new “qualified benefits options plan”:  

• A qualified benefit options plan is a written plan or arrangement offered by an employer to employees and former employees under which participants may elect to allocate tax-free employer contributions among the following qualified benefits:
  • non-elective employer retirement plan contributions that are excluded from gross income under Code section 402 or 403;
  • contributions to an HRA or HSA that are excluded from gross income under Code section 105 or 106;
  • amounts paid by an employer pursuant to a qualified educational assistance program that are excluded from gross income under Code section 127; and
  • any other benefits that are excluded from gross income under the Code.  
• Employees may not elect to receive cash or any other taxable benefit instead of qualified benefits.
• Rules similar to the cafeteria plan nondiscrimination rules under Code sections 125(b), (c), (e), and (g) apply.  
• With respect to a Code section 401(a) qualified plan that is included as a qualified benefit, for purposes of applying the requirements of Code sections 401(a)(4) and 416, the amount of the employer contribution made available to a participant is treated as an employer contribution made to the plan, without regard to whether the participant elects to have any portion of such amount contributed to the plan.

PLR 202434006 permitted an election between a defined contribution plan, an HRA, an HSA, and student loan payments under a qualified educational assistance program.  The CHOICE Act goes beyond that and allows an election for any benefits that are excluded under the Code. Presumably, this would include benefits such as a dependent care assistance program and a Trump Account.   

Here is a link to the bill:  https://steube.house.gov/wp-content/uploads/2026/04/Bill-Text-OPTIONS-Act.pdf