Medicaid and Individual market changes have taken up a lot of the oxygen in conversations about the One Big Beautiful Bill Act. But what can you expect for employee benefits?
Here are the five key changes that will impact your clients and their employees:
The act significantly broadens HSA eligibility, creating new opportunities for your clients and their employees.
Direct primary care compatibility: Employees enrolled in direct primary care arrangements—where they pay a monthly subscription fee (typically $100-150 for individuals or up to $300 for families) for unlimited primary care visits—can now contribute to HSAs. Even better, they can use their HSA funds to pay for these direct primary care subscriptions.
Bronze and catastrophic plans qualify: Any bronze or catastrophic plan sold on health insurance marketplaces will automatically qualify as a high-deductible health plan, making it HSA-compatible. This is particularly valuable for employers offering individual coverage health reimbursement arrangements (ICHRAs), where employers provide cash for employees to shop for their own coverage.
The tax advantages remain powerful: contributions are tax-deductible, growth is tax-deferred, and withdrawals for qualified health expenses are tax-free.
What started as a pandemic-era flexibility is now permanent law.
High-deductible health plans can now cover telehealth services with copays or coinsurance before employees meet their deductible, allowing them to access these services more easily. This "first-dollar coverage" for telehealth and remote services applies to any plan year beginning after December 31, 2024.
For employers already offering HDHPs, this change makes these plans significantly more attractive to employees who value convenient and accessible care.
Starting January 1, 2026, contribution limits for dependent care FSAs increase substantially:
These accounts allow both employers and employees to contribute pre-tax dollars for qualifying childcare expenses, including daycare and qualified in-home care. However, unlike some other benefits, these limits won't adjust for inflation over time.
Employers can now permanently help employees with student loan payments, with the annual tax-free contribution limit raised to $5,250 per year. Employers can pay both principal and interest on behalf of their employees, and any amount above the limit gets taxed as regular wages.
This limit will adjust annually with inflation, making it a sustainable long-term benefit offering.
The act creates entirely new savings opportunities for families.
Parents and caregivers can contribute to tax-advantaged accounts that work similarly to IRAs—contributions may be tax-deductible, growth is tax-free, but withdrawals may be taxed later. Key details include:
The One Big Beautiful Bill Act presents an opportunity to re-examine your employee benefits package. The expanded HSA eligibility, permanent telehealth coverage, and increased dependent care limits can all enhance the attractiveness of employee benefit packages.
Stay ahead of the curve by familiarizing yourself with these changes now. Your employees will appreciate your proactive approach to providing benefits that impact their lives.