The One Big Beautiful Bill: Key Takeaways Impacting Health Benefits

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, a wide-ranging piece of legislation that introduces several notable changes that may impact health benefits planning and administration. HR and benefits teams and benefits consultants may need to review current plans and policies to ensure alignment with the new requirements.

The following key provisions are included in the legislation:

Telehealth safe harbor reinstated. High-deductible health plans may continue to provide first-dollar coverage for telehealth and other remote medical services. This safe harbor expired at the end of 2024. The bill makes the safe harbor permanent and retroactive to January 1, 2025.

Allowance of HSAs with primary care service arrangements. Beginning in 2026, (i) coverage under a direct primary care arrangement generally will not disqualify an individual from contributing to an HSA (see detail below) and (ii) fees for a direct primary care arrangement may be reimbursed from an HSA.

A “direct primary care arrangement” is a program under which an individual may receive primary care services for a flat periodic fee. For this purpose, “primary care services” do not include procedures that require the use of general anesthesia, prescription drugs other than vaccines, or laboratory services not typically administered in an ambulatory primary care setting.

The aggregate fees for all direct primary care arrangements for an individual may not exceed $150 or $300 if the arrangement also covers dependents per month. The $150/$300 limit will be adjusted for inflation in future years. The bill addresses direct primary care arrangement fees only under the tax code provisions relating to HSAs. It does not define such fees as medical care under Code Section 213(d) or address whether such fees may be reimbursed from an FSA or HRA.

Employers should review FSA plan limits and communicate the new maximum to employees during open enrollment for the 2026 plan year.

Dependent Care Assistance Limit Increased. The maximum amount of dependent care assistance that an employer can provide on a non-taxable basis increased. This amount is commonly used as the contribution limit for a dependent care FSA. The exclusion limit will increase from $5,000 ($2,500 in the case of a married individual filing separately) to $7,500 ($3,750 in the case of a married individual filing separately) beginning in 2026. This limit is not adjusted for inflation, and the bill does not include an inflation adjustment.

Educational assistance programs. Under Code Section 127 educational assistance program, the maximum amount that may be reimbursed on a non-taxable basis currently $5,250 per year will be adjusted for inflation beginning in 2026. Under the same section, student loan repayments may continue to be reimbursed on a non-taxable basis. This tax exclusion was originally set to expire at the end of this year. The bill makes the exclusion permanent.

Employers offering educational benefits can continue tax-free student loan repayment support and plan for future budget increases based on inflation-adjusted limits.

Farewell to the bicycle commuting benefit. Beginning in 2026, qualified bicycle commuting expenses will no longer be reimbursable on a non-taxable basis under a commuter benefit plan.

If your benefits program currently includes this offering, be prepared to phase it out or transition employees to other commuter benefits.

In summary, employers should:

• Review plan documents for telehealth and HSA alignment.
• Update FSA and DCAP limits for 2026.
• Educate employees about changes during upcoming benefit enrollment seasons.
• Coordinate with payroll and finance to apply new exclusion thresholds and tax guidance.

Staying informed and proactive will be key in understanding how current provisions affect your organization and in preparing for future policy shifts that may bring more direct changes to the employee benefits landscape.

About Health Action Council 
Health Action Council is a not-for-profit 501(c)(6) organization representing mid-and large-size employers that enhance human and economic health through thought leadership, innovative services, and collaboration. It provides value to its members by facilitating projects that improve the quality and moderate the cost of healthcare purchased by its members for their employees, dependents, and retirees. Health Action Council also collaborates with key stakeholders – health plans, physicians, hospitals, and the pharmaceutical industry – to improve the quality and efficiency of healthcare in the community.