The article discusses the significant impact of the "One Big Beautiful Bill" (OBBB), a comprehensive piece of legislation passed by Congress on July 4, 2025. This bill introduces essential changes affecting employee benefits, particularly how they are taxed and who qualifies for them. HR and benefits leaders must adapt to these changes to maintain compliance and competitiveness in the workforce. The article outlines the key provisions of the OBBB, which include updates to health savings accounts (HSAs), telehealth policies, expanded eligibility for various plans, flexible spending account limits, and new student loan repayment assistance measures. The article also notes what proposals were omitted from the final version of the bill and provides recommendations for employers to adapt to the new regulations.
Key Points
Overview of OBBB:
- A major legislation affecting various sectors, including employee benefits.
- Represents significant updates to benefits-related tax laws.
Key Provisions Affecting Employee Benefits:
Health Savings Accounts (HSAs):
- Enhanced flexibility and accessibility.
- Permanent reinstatement of first-dollar telehealth coverage under HSA-qualified plans.
- Expanded eligibility for ACA Bronze and Catastrophic plans as HDHPs.
- Direct primary care (DPC) eligibility adjustments.
Flexible Spending Accounts (FSAs):
- Dependent Care Flexible Spending Accounts’ limits increased to $7,500 starting in 2026.
Commuter Benefits:
- Permanently eliminate tax-free bicycle commuting reimbursements.
Student Loan Repayment Assistance:
- Permanently allows tax-free contributions up to $5,250 for employer-sponsored student loan payments.
Trump Accounts:
- Introduces new tax-advantaged savings accounts for children, with federal and employer contribution opportunities.
Paid Family and Medical Leave (PFML):
- Permanent expansion of the PFML tax credit for employers who offer paid leave.
Proposals Omitted from OBBB:
- Changes to Individual Coverage Health Reimbursement Arrangements (ICHRAs) were not included.
- Ambitious reforms to HSAs, including modifications for Medicare enrollees and increased contribution limits, did not make the final cut.
Recommendations for Employers:
- Audit current benefits to identify compliance issues.
- Review new contribution limits and eligibility rules.
- Educate HR and payroll teams on legislative updates.
- Clearly communicate changes to employees.
- Collect employee feedback on new benefits.
- Consider versatile benefits platforms for managing compliance with new regulations.
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