Five ways the One Big Beautiful Bill Act will change employee benefits

We've written before about the One Big Beautiful Bill Act's impacts on the individual insurance market. But what can you expect from group coverage?

Here are the five key changes that will impact your clients and their employees:

1. Health savings accounts get a major expansion

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 clients 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.

2. Telehealth coverage becomes permanent for high-deductible plans

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. This "first-dollar coverage" for telehealth and remote services applies to any plan year beginning after December 31, 2024.

For your clients already offering HDHPs, this change makes these plans significantly more attractive to employees who value convenient, accessible care.

3. Dependent care flexible spending accounts see higher limits

Starting January 1, 2026, contribution limits for dependent care FSAs increase substantially:

• Single filers and married filing jointly: Up to $7,500 per year
• Married filing separately: Up to $3,750 per year

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.

4. Student loan assistance programs become permanent

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.

5. New tax-advantaged accounts for children under 18

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:

• Government kickstart: For children born between 2025 and 2028, the government may contribute $1,000 to get accounts started
• Annual limits: $5,000 per year from all sources, plus up to $2,500 from employers
• Inflation adjustments: These limits will increase annually with inflation

What this means for your business

These changes create new conversation starters with prospects and additional value propositions for existing clients. 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 clients will appreciate your proactive approach to helping them navigate the evolving benefits landscape.