Groom principals Katie Bjornstad Amin and Michael Kreps were featured in Tax Notes’ coverage of an International Foundation of Employee Benefit Plans (“IFEBP”) webcast. The article, “More Benefits Changes Likely in Wake of Tax Bill, Lawyers Say,” reported on their discussion of the One Big Beautiful Bill Act (“OBBBA”) and the areas where IRS guidance is still needed.
Tax Notes reported that Amin highlighted several provisions in the OBBBA that remain unclear. For example, although the law reinstates predeductible coverage for telehealth, the IRS has not defined the term or its scope. Amin explained, “What if you have a telehealth visit, and then later you go and do all these other things in person, like get labs and scans? Does that all fit within the telehealth visit, or is that now something else?”
According to Tax Notes, Amin also pointed out that Congress did not amend the definition of a high-deductible health plan to explicitly include direct primary care. She remarked, “So that’s one open question, is whether the IRS is going to say [direct primary care] has to be outside the plan, or can it be something provided within the plan, too?”
Amin raised concerns about the increased tax exclusion for dependent care assistance programs—from $5,000 to $7,500—because many employers already struggle with the IRS’s nondiscrimination testing: “Because the exclusion increased from $5,000 to $7,500, are we going to have even more of a testing issue?” She added, “I know there are some organizations that are approaching IRS and Treasury to try to get some relief on the nondiscrimination testing.”
The article noted that Amin concluded taxpayers should also anticipate further IRS guidance on other vague or undefined OBBBA terms.
Turning to the OBBBA’s introduction of “Trump accounts,” Tax Notes reported that Kreps described the provision as a surprise and noted open questions about their impact. He said, “One question is whether an employer can participate in and contribute to a Trump account, and if so, whether the account will be subject to ERISA. It’ll be an interesting experiment.”
On the tax advantages of such accounts, Tax Notes quoted Kreps as saying “It’s not the most generous tax benefit when you compare it to even a section 529 plan. There are better places to go if what you’re looking for is a tax benefit.”
Finally, Tax Notes reported that Kreps viewed the OBBBA as an improvement over the original bill, reflecting congressional responsiveness to industry input. At the same time, he cautioned that “There’s an intense need for revenue going forward…and so I do expect more benefits changes over the next couple of years.”
To read the full article, click here.
