Benefits managers urge Congress to protect education benefits

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Benefits managers across the country are urging Congress to protect the tax-free status of education assistance, arguing many employers rely on the benefit to retain workers.

More than 400 members of the Society for Human Resource Management took to the hill Thursday — the same day the House of Representatives passed a bill to overhaul the tax code — to protest the elimination of exemptions for employee benefits.

The bill, which passed 227-to-205 without Democrat support, eliminates the tax exclusion for tuition assistance of up to $5,250 a year. Companies in the nursing, engineering and manufacturing industries rely on this benefit, says Mike Aitken, vice president of government affairs at SHRM.

Benefits manager Lori Hoekstra agrees.

“As a Magnet-designated hospital for nursing excellence, our system is diligently working to meet the expectation that 80% of our nurses earn a baccalaureate degree by 2020,” says Hoekstra, a SHRM member and HR manager for compensation and benefits at Riverside Medical Center in Kankakee, Illinois. “Providing tuition reimbursement allows many employees to pursue healthcare careers and, in turn, enables them to purchase homes, provide for their families and give back to their communities through their work.”

See also: 401(k) plans remain untouched in tax bill passed by House

Without the tax exemption, employers could still give the benefit but employees will be taxed on it, as if it were compensation, Aitken says.

As SHRM members petition for Congress to keep the education benefit tax exempt, they also will advocate for the Workflex in the 21st Century Act, which expands paid leave for full- and part-time workers and gives flexible work options. Aitken says there’s a good chance the bill, which has been endorsed by bipartisan groups, will see movement in the House of Representatives.

“Elected officials want to hear from these folks and what the effect is going to be not on just the organization itself but the employees,” he says. “There are real, direct implications for employees and their families.”

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Law and regulation Employee benefits Benefit strategies SHRM