As a result of recent natural disasters and current economic uncertainty, Americans are more aware than ever of the need for legal advice to plan for their families' future and financial wellbeing. New legal issues that disproportionately affect lower and middle income workers and families continue to arise, including consumer fraud and now the mortgage foreclosure crisis. In addition to affecting home owners, the foreclosures are also forcing renters from their homes.

The ABA has long supported prepaid legal services plans as a way to increase access to the justice system for low- and middle-income Americans. These plans allow individuals and families to address legal issues before they become significant problems, reducing demands on already overburdened court systems and instilling confidence in our justice system. The plans' tax-favored status expired in 1992, not because of any opposition, but because of the need for revenue offsets in the 1992 deficit reduction act.

Legislation to restore the tax exclusion of group legal services benefits has received positive consideration, short of enactment, in the previous 108th and 109th Congresses. During the 108th Congress, the group legal services bill, H.R. 973, was included in H.R. 1776, the Pension Preservation and Savings Expansion Act of 2003, introduced by then-Representatives Rob Portman (R-OH) and Ben Cardin (D-MD). The Ways and Means Committee marked up H.R. 1776, but the group legal services provision was eliminated along with many others.

Also during the 108th Congress, Senators Gordon Smith (R-OR) and Blanche Lincoln (D-AR) in introduced S. 1556, the Group Legal Services Benefit Act of 2003. With the bipartisan support of seven committee members, then-Senate Finance Committee Chairman Charles Grassley (R-IA) included S. 1556 in his pension reform bill, S. 2424, the National Employee Savings and Trust Equity Guarantee Act (NESTEG.) The Finance Committee reported S.2424, including the group legal services provision, to the Senate. The Senate did not act on S. 2424 before adjourning.

In the 109th Congress, the legislation was reintroduced in both the House (H.R. 897) and the Senate (S. 1160) by Representatives Camp and Rangel and by Senators Smith and Lincoln, respectively. The House provision was also included in H.R.1961, then-Representative Cardin's pension reform package.

In the 110th Congress, reinstatement of the pre-tax status of group legal services benefits came close to, but just short, of enactment. Representative Pete Stark (D-CA), along with Representative Dave Camp (R-MI) co-sponsored the House legislation (H.R. 1840) while Senators Gordon Smith (R-OR) and Blanche Lincoln (D-AR) introduced a Senate companion measure, S. 1130.

Senator Lincoln and bill cosponsors unsuccessfully offered the provision as an amendment to legislation addressing the mortgage foreclosure. See floor statements.

In May 2008, a provision to reinstate the group legal service pre-tax status for one year was included in the House-passed version of the tax extender bill, H.R. 6049. The ABA wrote the Ways and Means Committee in strong support of this provision. The provision, unlike H.R. 1840/S. 1130, would cap the pre-tax benefit at $70. Several Senate versions of the tax extender bill, including S. 3335, also included the same provision. The 110th Congress, however, ultimately did not pass legislation that included the H.R. 1804/S. 1130.

Representatives Pete Stark (D-CA) and Paul Ryan (R-WI) on March 10, 2009 introduced H.R. 1423, the Legal Services Benefit Act of 2009. H.R. 1423 was referred to the House Ways and Means Committee for consideration. Senators Blanche Lincoln (D-AR) and Olympia Snow (R-ME) introduced the Senate version, S. 825, which was referred to the Senate Finance Committee. ABA Day in Washington participants lobbied in support of H.R. 1423/S. 825 as part of the event’s “Access to Legal Services” focus.

• Group legal plans are important to maintaining confidence in our justice system and the rule of law.
• Group legal plans efficiently and inexpensively provide preventative legal services to low and middle income Americans.
• Group legal services help ease the burden on overtaxed government programs.
• Group legal plans enhance productivity by allowing employees to focus on their jobs, not their legal troubles.

The ABA supports the reinstatement of the tax-preferred status of employer-provided group legal services benefit plans as a way to increase access to the justice system for low- and middle-income Americans.

August 13, 2009