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119-hr-8314119th CongressWALLET

OPTIONS Act

Sponsored By: Representative Steube, W. Gregory [R-FL-17]

Introduced

Summary

Allows employees to choose tax-free employer benefits instead of cash by creating Qualified Benefit Options Plans. The bill would add a new Internal Revenue Code section 125A so employers can offer written plans that let participants allocate employer contributions among tax-favored benefits.

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  • Workers and families: Employees could elect to direct employer contributions to things like retirement account contributions, a health reimbursement arrangement (HRA), a health savings account (HSA), or employer-paid education assistance rather than receive cash. Participants may not choose cash or other taxable benefits in place of qualified benefits.
  • Employers and plan administrators: Employers could set up these plans but must follow nondiscrimination rules with an exception for highly compensated and key employees similar to current section 125 tests. Employers must also follow added reporting and recordkeeping tied to section 6039D.
  • Former and retired employees: The definition of eligible participants explicitly includes former employees and retired employees, letting plans cover a broader group.

Note: The changes would apply for taxable years beginning after December 31, 2025.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 1 benefits, 0 costs, 0 mixed.

Employer plans let workers choose tax-free benefits

This bill would create a new kind of employer plan that lets employees (and some former employees) pick how employer contributions are used. You would be able to elect to move employer contributions into tax-excluded benefits such as health savings accounts, health reimbursement arrangements, employer-paid education help, or certain retirement-like contributions. Those amounts would not be included in your taxable income just because you chose among the benefits, but you could not take cash instead. Employers would need to follow nondiscrimination rules like current cafeteria plans and report these plans to the IRS. The rule would apply to tax years starting after December 31, 2025.

Sponsors & CoSponsors

Sponsor

Steube, W. Gregory [R-FL-17]

FL • R

Cosponsors

  • Rep. DelBene, Suzan K. [D-WA-1]

    WA • D

    Sponsored 4/15/2026

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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