IRS Gives Green Light for Employee Choice Between Different Pre-Tax Benefits

Summary

Employees increasingly request (and expect) choice in their benefits. The Internal Revenue Service (IRS) recently released Private Letter Ruling 202434006 (PLR), which approved an employer's program allowing employees to allocate an employer contribution among the 401(k) plan, retiree health reimbursement arrangement (HRA), health savings account (HSA), or educational assistance program (offering student loan repayments). The PLR provides welcome guidance to employers seeking to offer more tailored benefits to their employees.