What the One Big Beautiful Bill Means for Your Benefits

On July 4, 2025, President Trump signed the One Big Beautiful Bill (OBBB Act) into law. The bill introduces several changes that expand flexibility in benefit plan design, focusing on health savings accounts (HSAs), telehealth, dependent care, and educational assistance.

Here's a breakdown of the key updates and how they may impact your business.

1. Permanent Telehealth Coverage Flexibility for HDHPs

Effective for plan years beginning after December 31, 2024, high deductible health plans (HDHPs) can permanently cover telehealth and other remote care services before the deductible is met, without jeopardizing employees' HSA eligibility. Businesses that offer a high deductible health plan now have the long term flexibility to cover telehealth at low or no cost to employees, helping improve access and satisfaction.

2. Expanded HSA Eligibility

Beginning January 1, 2026, the Act expands eligibility for HSAs by allowing individuals in direct primary care arrangements (with fees no more than $150 per month for individuals or $300 per month for families) to contribute to HSAs. The bill also classifies bronze and catastrophic plans under the Affordable Care Act (ACA) as HDHPs, making them HSA-eligible. This allows businesses to open the door for more employees to take advantage of HSAs, even those enrolled in alternative coverage models or individual exchange plans.

3. Increased Dependent Care FSA Limits

Starting in 2026, the annual dependent care flexible spending account (FSA) limits will increase to $7,500 for single or joint filers and $3,750 for married individuals filing separately (current limits are $5,000 and $2,500, respectively). If you offer a dependent care FSA, we’ll help ensure your plan is updated to reflect the new limits in time for open enrollment.

4. Continued Employer Student Loan Contributions

The ability to contribute to employees’ student loan payments through an educational assistance program, up to $5,250 per year, tax-free, has been made permanent. Effective for taxable years beginning after 2026, this Act annually adjusts the limit for inflation. If you already offer this, no action is required, but it’s good news that the provision is now permanent.

5. New Trump Accounts for Children

A new tax-advantaged savings option called a Trump Account will launch in 2026 for children under the age of 18. These accounts function like Individual Retirement Accounts (IRAs), allowing tax-deferred growth on contributions, with a general limit of $5,000 per child. Employers will be able to contribute up to $2,500 per year, tax-free, per employee or an employee's dependent (adjusted annually for inflation beginning after 2027). While this benefit is optional, it may appeal to businesses looking to enhance family-focused benefits. These programs would follow rules similar to dependent care FSAs, including documentation and nondiscrimination testing.

If you have questions about how these updates affect your current benefit offerings, please contact your North Risk Partners Risk Advisor. Don’t have an advisor? No problem. We’ll help you find one.

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This Legal Update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
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Posted in Regulatory Updates