This summer, the U.S. House and Senate took a break from its floundering over debt and deficits to consider a few measures affecting employee benefits. Perhaps it was refreshing, spending at least a little time thinking about something else.
Let’s take a look at the latest House and Senate bills that could affect employee benefits.
The Medical FSA Improvement Act (S. 1404) would eliminate the “use-it-or-lose-it” policy — by which the employee loses (and the employer gains) unused health FSA funds at the end of the plan year. Instead, employees could cash out the unused balances, which would be taxed at that point.
Expanding tax breaks for employee benefits may have questionable chances of passage when the nation is roiled in a virtual civil war over deficit spending.
The Beneficiaries Act of 2011 (H.R. 2088) would expand the income tax exclusion for employer-provided health coverage to employees’ spouses and dependent children so that it would also include coverage provided to other beneficiaries, including domestic partners.
The Equal Access to COBRA Act of 2011 (H.R. 2310) would grant COBRA coverage to employees’ domestic partners and the children of those domestic partners.
The Family and Medical Leave Inclusion Act (H.R. 2364) would permit leave to care for family members other than spouses and children, including domestic partners.
More conservative members might oppose measures (like these three, as well as their Senate companion bills) designed to funnel benefits to domestic partners and same-sex spouses. Spending hawks may oppose such expansions of tax breaks, as well.
The Mobile Workforce State Income Tax Simplification Act of 2011 (H.R. 1864) would limit state tax on wages or other remuneration earned by an employee who performs duties in more than one state, to: (1) the state of the employee’s residence; and (2) the state in which the employee is present and performing employment duties for more than 30 days.
Will these bills become law? Maybe not. They’re just proposals for now. But keep an eye on them: they could spell fresh rules and regulations down the road.