The One Big Beautiful Bill Act (OBBBA), passed on July 4, 2025, has brought sweeping changes across many different areas. One such impactful change is to employee benefits.

Health Savings Account Changes

Pre-deductible Coverage for Telehealth Services

There have been many beneficial changes regarding Health Savings Accounts (HSAs) brought forth by OBBBA. Starting retroactively, the IRS now allows for HSA plan years starting December 31, 2024, to utilize High-Deductible Health Plans (HDHPs) to use offered pre-deductible coverage, also known as first-dollar coverage, for any telehealth services without affecting the eligibility to gain an HSA.

Direct Primary Care

• Now, HSA owners can qualify and participate in direct primary care (DPC) arrangements following certain limitations. Primary care arrangement programs are programs that allow patients to pay their primary care physician a monthly or annual fee for almost unlimited access to all or most primary care services. Previously, HSA owners could not participate in a DPC arrangement. However, now after January 1, 2026, as long as the fees for DPC arrangements are not greater than $150 per month per individual or $300 per month for family coverages, the expenses can be qualified under an HSA, but if any coverage was for general anesthesia, certain prescriptions drugs other than vaccinations, or lab services then those expenses will still be disqualified.
• Additionally, Bronze and Catastrophic health plan owners can now contribute to HSAs. Originally, people were ineligible to contribute to an HSA if they had a bronze or catastrophic health plan because those plans offered low premiums but had high out-of-pocket costs, and those costs exceeded the dollar limit the IRS defined for health savings accounts in order to be eligible to contribute to HSAs health plan.

Education Changes

The tax exclusion for employer-paid student loan repayment assistance was supposed to be sunset at the end of 2025, but now it has become a permanent exclusion. This is an important change to employee benefits because employers are allowed to make up to $5,250 per year in tax-free payments towards an employee’s student loans, and that amount will be adjusted for inflation beginning in 2026.

Employer-Provided Childcare Tax Credit

For employees who have a child or children, the changes toward the employer-provided childcare tax credit are excellent news for you. Starting after December 31, 2025, employers will now be able to claim a credit equal to 40% of qualified childcare expenses instead of the original 25% and the annual credit limit now rises from $150,000 to $500,000. Additionally, there are also changes to the Dependent Care Flexible Spending Account and now New Child Savings Accounts. For people who own a Dependent Care Flexible Spending Account, an account where they set aside money from your paycheck(s) that will be used to pay the care of a dependent while they continue working, the pre-tax limitation has been increased from $5,000 to $7,500 for single filers or from $2,500 to $3,750 for people who are married filing separately.

Trump Accounts (New Child Savings Accounts)

There is a new child savings account that can be taken for U.S. citizens born between January 1 of 2025, and December 31 of 2028, called a “Trump Account”. People who get these new child savings accounts will gain a one-time $1,000 contribution from the federal government and will have a $5,000 annual contribution limitation, with employers being able to contribute up to $2,500 annually per child.

Paid Family and Medical Leave Credit

Another excellent change brought forth by OBBBA is the change towards paid Family and Medical Leave (PFMLA). For employers, the beneficial change is that the PFMLA credit is no longer set to sunset after December 31, 2025. However, the most impactful change is that the threshold that employees must reach to gain PFMLA is now that employees must be under the service of the employer for six months instead of one year.

Transportation and Moving Benefits

At the start of 2025, the employer-provided bicycle commuting reimbursements or moving expense reimbursements will no longer be a tax exclusion. While employers can still choose to offer reimbursement for commuting or for moving expenses and still deduct the commuting reimbursement as a business expense, any employee who receives such reimbursement as taxable income. However, there is an exception for the moving expense reimbursements for any active-duty members of the U.S. armed forces who are required to move due to a change in where they are stationed.

Conclusion

The One Big Beautiful Bill Act has brought forth many advantageous employee benefits and improvements. It is now possible for employees to have High-Deductible Health Plans/Bronze plan or Direct Primary Care arrangements and still qualify for a Health Savings Account. Furthermore, employees can still expect their employers to make tax-free payments towards their student loans because the employer-paid student loan repayment assistance credit is now permanent. Employees may also be able to expect more employer-provided childcare due to the increased credit limit employers will get, and employees will now be able to claim Paid Family Medical Leave after working six months with an employer instead of one year. Together, these changes offer significant advantages for employees.

Contact Us Today

Understanding how the One Big Beautiful Bill Act affects employee benefits can help you make the most of new opportunities for savings and support. Call us at 203-489-0612 to discuss how these changes may impact you or your organization.

Written by: Tyler Goncalves