On July 4, President Donald Trump signed the “One Big Beautiful Bill Act,” which includes major changes for employee benefits.
Six notes:
1. Starting January 1, individuals enrolled in bronze and catastrophic ACA plans will be eligible to contribute to HSAs.
2. Direct Primary Care arrangements are now HSA-eligible, as long as DPC fees do not exceed $150/month for individuals or $300/month for families. DPC fees are also recognized as qualified medical expenses that can be paid tax-free from an HSA.
3. The HSA-first-dollar coverage for telehealth services is permanently allowed, effective retroactively from plan years beginning after December 31, 2024. This ensures that telehealth and remote care services are accessible without disqualifying the HSA.
4. Starting January 1, 2026, the Dependent Care FSA limit will increase to $7,500 per year ($3,750 for married couples filing separately), offering more flexibility in dependent care benefits.
5. Several ICHRA-related provisions were removed from the bill, including the proposed rebrand from ICHRA to CHOICE Arrangements and a national employer tax credit to offer ICHRAs.
6. HSA-related provisions that were left out of the bill:
- Medicare Part A enrollees being eligible for HSAs.
- Using HSAs for gym memberships or physical exercise/activity costs.
- Allowing both spouses to make the $1,000 catch-up contribution (age 55+).
- Allowing HSAs to be used for premiums after age 65 for non-HSA-eligible individuals.
