Legislative Update

September 1, 1996 Advisory
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Two new laws have important effects for employers. The Small Business Job Protection Act of 1996 raises the federal minimum wage to $5.15 an hour effective September 1997, and makes settlements of discrimination claims taxable. On benefits, it restores the exclusion for employer-provided educational assistance, simplifies several qualified plan rules, and repeals the ban on 401(k) plans sponsored by tax-exempt employers. A second new act, the Health Insurance Portability and Accountability Act of 1996 , creates tax-favored savings accounts for the payment of medical expenses and increases the health coverage cost deduction for the self-employed. For more information on HIPPA, please see the Summer 1997 issue of the Wiggin & Dana Employment Advisory .