Signed into law on July 4, 2025, the One Big Beautiful Bill Act's (the OBBBA) most notable provisions are unrelated to employee benefits. However, the OBBBA does include some new benefit enhancement options for employee benefit plan sponsors, including provisions related to health savings accounts (HSAs), dependent care assistance programs (DCAPs), student loan repayment assistance, and the creation of "Trump accounts" designed to increase savings for children.
With the exception of the pre-deductible telehealth services safe harbor (effective January 1, 2025), the changes are effective for tax years after December 31, 2025, giving plan sponsors limited time to consider whether to implement the changes in advance of open enrollment for 2026.
Below are highlights of the key provisions for plan sponsors:
High Deductible Health Plan and HSA Enhancements
Early versions of the OBBBA included a host of proposals to significantly expand HSA availability and benefits, such as granting eligibility to Medicare Part A enrollees, allowing reimbursement of gym memberships, and increasing contribution limits. Although the final version is far more limited in scope, the OBBBA nonetheless enhances high-deductible health plan (HDHP) coverage and HSA eligibility in three ways:
- Pre-Deductible Telehealth Services. The OBBBA makes permanent the safe harbor for HDHP sponsors to provide benefits for telehealth visits and remote care services before application of the deductible. Originally enacted as part of the Coronavirus Aid, Relief and Economic Security Act of 2020 (the CARES Act), and extended several times afterwards, the telehealth safe harbor previously expired as of January 1, 2025. As a result, the OBBBA includes a retroactive effective date for the telehealth safe harbor to plan years beginning on or after January 1, 2025, which will allow sponsors to avoid a gap in coverage.
- Eligibility for Bronze and Catastrophic Level Exchange Plans. The OBBBA provides that bronze-level or catastrophic plans offered on the individual market exchange will constitute HDHPs for purposes of HSA-eligibility.
- Direct Primary Care Arrangements. The OBBBA
clarifies that direct primary care (DPC) arrangements will not be
considered disqualifying coverage for purposes of HSA eligibility
and contributions. DPC arrangements are limited to those where an
individual pays a monthly fixed-rate fee (i.e., a
subscription) for "primary care services" from a primary
care provider. "Primary care services" are defined to
exclude any procedures requiring general anesthesia, prescription
drugs other than vaccines, or laboratory services not typically
administered in an ambulatory primary care setting.
The law also confirms that DPC arrangement fees will be considered qualifying medical expenses eligible for HSA reimbursement. To qualify for the exemptions, the OBBBA establishes a monthly limit for DPC arrangement fees to $150 for individuals and $300 for families (indexed for inflation).
DCAP Enhancements
The OBBBA increases the annual limit for DCAPs from $5,000 to $7,500 ($3,750 for married couples filing separately). As in previous years, the annual DCAP limit is not indexed for inflation.
Student Loan Repayment Assistance
Set to expire on December 31, 2025, the OBBBA makes permanent the tax exemption for employers to provide tax-free student loan repayments under a qualified educational assistance program. The OBBBA also sets the limit for qualified educational assistance payments at $5,250 annually (now indexed for inflation).
Trump Accounts
The OBBBA creates a new type of tax-preferred savings account, known as a "Trump account," that can be established for children under the age of 18. Designed to resemble individual retirement accounts (IRAs), Trump accounts allow parents to contribute to their children's accounts on a non-deductible, after-tax basis, with investments growing on a tax-free basis.
Trump accounts must be invested in low-cost U.S. index funds (such as the S&P 500) until the first day of the calendar year in which the child attains age 18, and are subject to annual limits on contributions ($5,000 per child per year, indexed for inflation). Distributions are prohibited until age 18, at which point they will be subject to the same restrictions as a traditional IRA, including normal income taxation and the 10 percent early withdrawal penalty for distributions before age 59-1/2 (the penalty is waived for certain qualifying expenses such as educational expenses and first-time home purchases).
The OBBBA also allows employers to provide up to $2,500 (indexed for inflation beginning in 2027) in tax-free contributions to the Trump accounts of employees' children. To qualify for favorable tax treatment, the employer-provided program must be described in a separate written plan document and satisfy similar tax requirements as are applied to DCAPs (i.e., nondiscrimination testing). The OBBBA also includes a Trump account pilot program where the federal government will provide a $1,000 contribution to U.S. citizen children born between January 1, 2025, and December 31, 2028.
Final Thoughts
The OBBBA's benefits-related changes should provide some additional options and flexibility for employers interested in enhancing their employee benefit programs. Employers wishing to take advantage of these changes for 2026 should begin working with qualified legal counsel and other service providers as soon as possible to ensure changes are adopted in advance of open enrollment. However, employers interested in establishing a Trump account contribution program should consider waiting for further federal guidance on a range of issues (including contribution limits and distribution restrictions) before taking significant steps toward adoption.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
