The One Big Beautiful Bill Act (“OBBBA”) signed into law on July 4, 2025 contains a number of benefits related updates, even if the final version that was signed into law did not include a significant number of benefits provisions that had been included in prior versions. As employers move forward to address the provisions that were passed, the omitted provisions may provide a glimpse of benefits changes that we may see in the future.

 

HSAs and Telehealth

 

In order to be eligible for health savings account (“HSA”) contributions, individuals must first have coverage under a qualifying high-deductible health plan (“HDHP”). Outside of certain exceptions, such as for preventive care and insulin, those enrolled in qualifying HDHP coverage are also usually responsible for satisfying the minimum HDHP deductible before the health plan provides coverage.

 

In 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act allowed HDHPs to also cover telehealth and remote care services before the deductible on a HDHP. This provision was initially renewed in April 2022, and then again in December 2022. The provision ended for plan years beginning after December 31, 2024.

 

The OBBBA now permanently allows HDHPs to cover telehealth and remote care services before the deductible has been satisfied. This means HDHPs can provide telehealth services without cost sharing, or cost sharing that may be less than the fair market value of the services. In addition, the OBBBA provision effective retroactive to plan years b retroactive to plan years beginning after December 31, 2024. Off-calendar year plans that included this coverage as part of their 2024 plan year and are still in that 2024 plan year can continue this seamlessly for the 2025 plan year. Calendar year plans, as well as off-calendar year plans that already renewed for 2025, and that do not currently include the provision, may now add it.

 

This new permanent provision allows employers to cover telehealth services at no cost to HDHP participants, but it is not mandatory to provide such coverage. In addition, employers also have the option to make the change retroactively for 2025, but that is also not required. Plan sponsors must balance the provision of the new benefit with administrative complexities and potential costs.

 

Employers with fully-insured HDHPs will need to consult with their carrier on availability to reinstate the coverage in 2025, as well as their willingness to do so retroactively. For employers with self-insured HDHPs, similar discussions on capabilities will need to happen with their applicable third-party administrator. Employers must also consider that changes to telehealth coverage may result in the need to adjust employee communication materials, as well as the plan’s Summary Plan Description.

 

HSAs and Direct Primary Care Service Arrangements

 

Direct Primary Care (“DPC”) service arrangements have been a growing area in the employee benefits market for a number of years. Proposed rules from 2020 held that certain DPC arrangements were to be considered as separate and additional forms of health insurance, meaning that HDHP participants could not simultaneously contribute to an HSA and also pay DPC fees. However, those rules were also never finalized.

 

OBBBA now permits HDHP participants to also enroll in DPC arrangements while maintaining their eligibility to contribute to an HSA. Starting with months beginning after December 31, 2025, OBBBA clarifies how these arrangements can coexist with HSAs, as long as certain conditions are met.

 

DPCs meeting the statutory definition of Direct Primary Care Service Arrangements, as discussed below, will be considered to be HSA-compatible as long as the aggregate cost for all DPCs does not exceed $150 per month for the individual, or $300 per month for DPCs covering more than a single individual.

 

A Direct Primary Care Service Arrangement is an arrangement under which an individual is provided medical care consisting solely of primary care services provided by primary care practitioners, and the sole compensation for such care is a fixed periodic fee. For purposes of this definition, “primary care services” shall not include:

 

- 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.

 

The key takeaway is that cost alone does not determine whether a DPC arrangement is HSA-compatible. The form of the DPC and the services included must also be taken into consideration.

 

In addition, and starting with months beginning after December 31, 2025, DPCs will also be considered qualified medical expenses for HSA purposes. This means that HSA funds can be used to pay DPC premiums. To accomplish this change, OBBBA modifies 26 U.S.C §223, which applies only to HSAs. This change does not modify 26 U.S.C §213(d), which is the broader definition of medical expenses for tax purposes, impacting both FSAs and HRAs.

 

HSAs and Certain Exchange Plans

 

Also starting with months beginning after December 31, 2025, certain plans available as individual coverage through the marketplace exchanges will now be treated as HDHPs. This applies only to bronze and catastrophic plans available as individual coverage through an exchange. This new flexibility does not apply to bronze or catastrophic plans offered in the group market. Likewise, it does not apply to bronze or catastrophic individual coverage which is not available through an exchange, (i.e., an off-exchange only plan). In addition, and perhaps most notably, this change will allow enrollees in such plans to now contribute to an HSA.

 

Dependent Care Limit Increases

 

Dependent Care Assistance Programs (“DCAPs”) also known as Dependent Care FSAs (“DCFSA”) allow employees to contribute pretax dollars towards the cost of eligible childcare expenses. Except for a one time increase to the annual contribution limit during the COVID-19 pandemic, the contribution limit has been unchanged since 1986.

 

Under OBBBA, and starting with tax years beginning after December 31, 2025, the maximum annual contribution limit for DCAPs will increase from $5,000 (or $2,500 for married individuals filing separate tax returns) to $7,500 (or $3,750 for married individuals filing separate tax returns).

 

The Cutting Room Floor

 

As noted earlier, a number of benefits provisions were included in earlier versions of OBBBA, but ultimately did not make it to the final version. It is possible (though certainly not guaranteed) that these provisions will resurface at a later date. These provisions include:

 

- Allowing individuals with age-based Medicare Part A to be eligible for HSA contributions.

- Allowing individuals with a spouse with a health FSA to be eligible for HSA contributions.

- Allowing certain medical expenses incurred before an HSA is established to be HSA eligible.