News Archive

"Beginning June 30, 2027, all noncompetition covenants are void and unenforceable unless they fall under an exception to the law.... The statute also takes an indirect swipe at training repayment agreement provisions (TRAPs), stay or pay provisions, and incentive clawbacks and forfeitures."  MORE >>

"Educational assistance programs under Code Section 127 currently can be used to help employees repay certain student loans, though certain restrictions apply.... The loan repayment provision, originally set to expire at the end of 2025 ... is now permanent and applies to payments made after March 27, 2020."  MORE >>

"[E]ffective January 1, 2026, California law significantly restricts employers' ability to include claw-back or repayment provisions in employee agreements, including provisions tied to tuition reimbursement.... New York's Trapped at Work Act similarly restricts the use of employment promissory notes, requiring repayment of training costs. A recently enacted amendment to the law ... delays enforcement and created a narrow exception allowing for tuition repayment agreements, provided strict statutory conditions are met."  MORE >>

"Many employers include a brief description of their educational assistance program in their employee handbook and consider the issue addressed. While handbooks are a useful communication tool, they are not sufficient for tax purposes. Under Internal Revenue Code Section 127, educational assistance programs must be established and maintained pursuant to a separate written plan document in order for benefits to be excluded from employees’ taxable income."  MORE >>

"Employers that are considering whether to fund these Accounts may find that there are more effective ways of providing compensation and promoting savings. Employees may be more interested in placing money into a more flexible savings option, such as a retirement savings account, Health Savings Account or 529 account."  MORE >>

"Employer-sponsored education programs offer a high return in the areas like retention and professional growth, but new evidence shows how their influence on knowledge sharing can positively impact every employee in the workplace.... 80% of employees participating in education programs through work feel more confident helping others on their team, 54% said they have shared the new skills they've learned and 71% say they are more productive."  MORE >>

"Here are some of the main ways OBBBA's tax cuts and spending reform will affect healthcare, retirement, education and more, and what benefit leaders should prioritize as open enrollment approaches."  MORE >>

"To make your organization's educational assistance program more valuable, amend it to make clear that the program's $5,250 benefit is indexed and includes qualified student loan payments."  MORE >>

"The provision was set to expire on Dec. 31, 2025, but employers can now make the benefit a permanent part of their educational assistance programs."  MORE >>

"[P]lan sponsors should consider whether offering first dollar coverage for telehealth coverage or a DPC Arrangement meets their organization's employee benefits strategies. Plan sponsors that want to offer loan assistance through their qualified education assistance plan will need to amend their plan ... Plan sponsors may always want to evaluate how the increased [DCAP] limit may impact nondiscrimination testing."  MORE >>

"Although some of the OBBB's benefits provisions simply make permanent existing temporary suspensions in the Code, others will provide opportunities for enhancement or expansion of employee benefit programs.... Conversely, the OBBB also presents some challenges for employers, who must now revise how they monitor certain executive compensation amounts, and make operational changes to their payroll administration systems for certain wages such as overtime pay."  MORE >>

"Under current law, employers may contribute up to $5,250 annually per employee toward student loan repayment without those payments being counted as taxable wages. This provision, originally expanded by pandemic relief measures, allows workers to receive tax-free help paying down qualifying student debt."  MORE >>

"The final version of the Bill did not include many of the proposed revisions to HSAs that were included in earlier drafts. However, the following changes were codified: Telehealth safe harbor ... Primary care service arrangements ... Dependent Care Assistance programs ... Student loan repayments ... Childcare tax credit ... Individual Coverage Health Reimbursement Arrangements (ICHRAs) ... Trump accounts ... [ACA] subsidies."  MORE >>

"The budget reconciliation bill signed on July 4, 2025, removes the sunset date on the employer exclusion for employee student loan repayment assistance, making the exclusion permanent. Further, the bill calls for the $5,250 annual cap on excludable payments to adjust with inflation moving forward, beginning with taxable year 2026. The employer exclusion changes come amid a revamp to student loan repayment assistance programs."  MORE >>

"The budget bill permanently extends the ability for employers to make tax-free student loan payments through education assistance programs.... [S]tarting in 2026, the annual $5,250 benefit limit will for the first time be indexed for inflation. The increased limit will affect all benefits provided through an education assistance program, including tuition assistance programs."  MORE >>

"Creating mental health and financial guidance practices can make a significant impact.... A well-structured financial education program can help your employees understand the importance of managing their repayment in a way that minimizes long-term negative impacts.... Employers are now able to offer assistance through student loan matching contributions ... to their retirement plan."  MORE >>

"[1] Public employee compensation: Expansion of deduction limit applicable to executive compensation ... [2] Continuation of employer credit for paid family and medical leave ... [3] Health Savings Account provisions ... [4] Increased limits for Dependent Care Assistance Programs ... [5] Continuation of employer-provided educational assistance ... [6] [T]he House [had] proposed eliminating the deduction for bicycle commuting reimbursements ... However, the final BBB retains the deduction for bicycle commuting reimbursements.... [7] Tax-exempt organizations: Expanded excise tax on excess compensation."  MORE >>

"Employers that currently sponsor an HDHP that provides telehealth benefits or a stand-alone telehealth plan should review their plans to incorporate any benefits changes given the passage of this Act, and may make those changes retroactively to January 1, 2025.... Employers that choose to increase the limit applicable under their DCAP/DCFSA for taxable years beginning on or after January 1, 2026 should amend any communications and plan materials to reflect the updated limit."  MORE >>

"The OBBBA introduces new birth-based custodial accounts, (i.e., 'Trump accounts') ... [which] would be traditional [IRAs] subject to special rules until the year a child turns age 18 ... The OBBBA provides eligibility criteria to establish a Trump account, defines the types of contributions that may be made, establishes the rules for when distributions may occur, outlines the tax treatment of these accounts, and defines the eligible investment options and reporting requirements."  MORE >>

"[E]mployers will need to brace for the potential of increased enrollment due to various provisions of the Act which have been predicted to decrease Exchange enrollment. With more employees turning to employer sponsored plans, plan sponsors will be vulnerable to increases in premium costs, claims costs, penalty exposure, and compliance risk.... The Act includes a few other modest employee benefits changes which may further help to fortify non-health employer offerings and attract employees amidst the flux in the health benefits space."  MORE >>

"From additional tax deductions for workers to new savings vehicles for children, the benefits-related sections introduce changes that span traditional compensation structures, family support programs, and organizational compliance obligations."  MORE >>

"[1] Telehealth before meeting a High Deductible Health Plan's (HDHP) deductible ... [2] Dependent care FSA limit raised starting in 2026 ... [3] Bronze and catastrophic exchange-based plans are now eligible as HDHPs ... [4] Tax-free student loan repayment assistance."  MORE >>

"[Some groups] are lobbying for employers to be able to make tax-free contributions to employees' 529 plans as an additional benefit. [PSCA] asked plan sponsors if this is something their organization would consider doing if it was allowed. While thirty percent said no, an equal percentage said maybe, and a quarter are unsure -- only 15 percent said they would definitely be interested in this."  MORE >>

"The House Bill [1] includes several provisions that would expand eligibility to contribute to HSAs and make HSAs more flexible, effective for taxable years beginning after December 31, 2025 ... [2] includes ... changes to HRA rules to make HRAs more flexible, effective for taxable years beginning after December 31, 2025 ... [3] would make permanent the ability to reimburse student loan payments under a Section 127 education assistance program ... [4] [increases the] maximum tax credit employers would be allowed for providing qualified child care ... from $150,000 to $500,000 ... [5] would make permanent the employer tax credit for a percentage of wages paid to qualifying employees while they are on paid family and medical leave."  MORE >>

"[A] host of employer-friendly provisions [would] expand eligibility and uses for Health Savings Accounts and Health Reimbursement Arrangements, extend and enhance the employer tax credit for paid family and medical leave, and extend employers' ability to provide tax-free educational assistance. An extension of pandemic-related telehealth flexibility for High-Deductible Health Plans is not in the measure."  MORE >>