Summary of Employee Benefits in the OBBBA

The massive budget reconciliation bill known as the One Big Beautiful Bill Act (OBBBA) was signed into law by President Trump on July 4, 2025. The bill included various employee benefits provisions tucked into its depths, including changes for health savings accounts (HSAs), dependent care assistance programs (DCAPs), student loan payments under educational assistance programs, and qualified transportation plans. The benefit-related changes are summarized below.

Health Savings Accounts (HSAs) - IRC §223

OBBBA Changes

• Telehealth – For plan years beginning in 2025, telehealth may be offered with no cost-sharing without impacting HSA eligibility.
• Direct Primary Care – For plan years beginning in 2026, certain direct primary care (DPC) arrangements may be offered with no cost-sharing without impacting HSA eligibility.  Additionally, HSA funds can now be used to reimburse any fees paid for such arrangements.
• Marketplace Plans – Beginning in 2026, bronze-level and catastrophic individual plans purchased through the Marketplace will be treated as high-deductible health plans (HDHPs) and allow for HSA eligibility, regardless of plan design. Because this change only affects individual policies, it will have little impact on most employer plans other those employers offering an ICHRA or QSEHRA.

Telehealth - Beginning in 2025

OBBBA Changes

To encourage individuals to avoid hospitals when appropriate during the COVID-19 health crisis, Congress passed relief permitting plans to cover telehealth and other remote care services before a participant satisfied the HDHP’s deductible without impacting HSA eligibility. Since that time, such relief has been extended on multiple occasions, but the most recent relief expired at the end of 2024 plan years. The OBBBA has now made this relief permanent. Retroactive back to the beginning of 2025, which is when the relief expired for calendar year plans, coverage for telehealth and other remote care services that is available with reduced or no cost-sharing will not affect individuals’ eligibility to contribute to an HSA.

Direct Primary Care (DPC) - Beginning in 2026

OBBBA Changes

Historically, it has been unclear how access to DPC impacted eligibility to contribute to an HSA. Most assumed that access to DPC prior to the minimum HDHP deductible interfered with HSA eligibility. Beginning in 2026, participation in DPC arrangements that meet the following requirements will not cause a loss of HSA eligibility:

• The DPC must be subject solely to a fixed monthly fee of no more than $150 for an individual or $300 for more than one individual (subject to annual indexing); and
• The DPC must involve medical care provided by a primary care practitioner. Procedures that require the use of general anesthesia, prescription drugs (other than vaccines), and laboratory services not typically administered in an ambulatory primary care setting do not qualify as primary care.

In addition, fees paid for such DPC arrangements are treated as eligible medical expenses for purposes of HSA reimbursement.  

Other HSA provisions that did not make the signed Bill.

• On-site employee clinic for individuals with HSA accounts
• Expansion of HSA eligible qualified medical expenses to include ‘qualified sports and fitness expenses’
• Allow both spouses to make catch-up contributions to the same HSA
• Allow certain health FSA and HRA distributions to be rolled over to an HSA in connection with the enrollment in an HDHP
• Special rule for certain medical expenses incurred before establishment of the individual’s HSA account
• Contributions allowed if spouse has health FSA
• Increase in HSA contribution limits for certain individuals
• Individuals entitled to Part A of Medicare allowed to contribute to HSAs

Dependent Care Assistance Programs (DCAPs) - IRC §129

OBBBA Changes

Beginning in 2026, the maximum annual reimbursement limit is increased from $5,000 to $7,500 (or $3,750 for married individuals filing separately). 

This amount is still not indexed for inflation, meaning it will remain at $7,500 until Congress changes the limit again.

Student Loan Payments - IRC §127

OBBBA Changes

Beyond 2025, employer student loan payments or reimbursements of up to $5,250 (indexed annually) will continue to quality for tax-favored treatment as a type of §127 educational assistance program.

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, employer payments of student loans were made excludable from employees’ taxable income under §127 up through the end of 2025. The OBBBA makes this ability to treat student loan payments as an eligible expense under §127 permanent. In addition, the annual limit of $5,250 for all §127 eligible expenses is now set to be indexed annually (previously fixed at $5,250).

Qualified Transportation Plans - IRC §132

OBBBA Changes

• Beginning in 2026, the ability to reimburse employees for bicycle commuting expenses on a tax-favored basis under §132 is permanently removed.
• Beginning in 2026, the method for determining the annual inflation amount for qualified transportation benefits under §132 is adjusted.

2026 Payment Parameter Change in Formula

OBBBA Changes

There has been a change in the formula for how the ACA maximum out of pocket (MOOP) limit is calculated.  The new formula has been used to calculate the MOOP for the 2026 plan year.

• Previously announced 2026 MOOP
  • $10,150 single maximum
  • $20,300 family maximum
• New re-calculated 2026 MOOP
  • $10,600 single maximum
  • $23,200 family maximum

The new MOOP are effective for new and renewing plan years beginning January 1, 2026.

Remember:  The ACA MOOP must be embedded if family MOOP exceeds single MOOP. 

For example – if 2026 family MOOP is above $10,600, the plan must start to pay if any individual within that family unit incurs $10,600 in medical expenses.

CHOICE Arrangements and Employer Credit for CHOICE Arrangements (ICHRAs)

There were provisions in the OBBBA regarding ICHRAs that were included in the House version of the Bill.  The two provisions were not included in the Senate’s Bill and therefore not in the Bill signed by the President on July 4. 

They were:

• ICHRAs were to be renamed to CHOICE Arrangements
• CHOICE arrangements were to:
  • Remove the class for staffing company employees
  • Change the deadline to issue the ICHRA notice from 90 days before the beginning of the plan year to 60 days
  • Require to report value of the ICHRA on the W-2
• To allow pre-tax salary reduction for exchange coverage if the employee participates in a CHOICE arrangement
• To provide a 2-year tax credit for non-applicable large employers that offer a CHOICE arrangement for the first time

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