On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBB) into law. The legislation includes several key changes affecting employee benefit plans, including expanded flexibility for telehealth and direct primary care benefits, and enhancements to Health Savings Accounts (HSAs) and Dependent Care Flexible Spending Accounts (DCFSAs). With the exception of the telehealth relief extension, the following changes are effective beginning January 1, 2026.

Permanent Extension of Telehealth Relief

The OBBB permanently extends telehealth relief originally provided under the CARES Act. Although this relief expired on December 31, 2024, it is now retroactively reinstated for plan years beginning on or after January 1, 2025.

The relief allows employers to continue offering telehealth benefits and other remote care services on a first-dollar basis without causing employees to lose HSA eligibility. This relief is optional and can be implemented either prospectively or retroactively.

Direct Primary Care Arrangements (DPCAs)

The OBBB also introduces a new exception to the high-deductible health plan rules, which will allow individuals to participate in a DPCA without impacting HSA eligibility. Under a DPCA, individuals pay a fixed monthly or annual fee to access services from a primary care provider. DPCAs generally cover primary care but may also cover non-primary care services.

To qualify under the new law:

• The DPCA must offer only primary care services, and
• Monthly membership fees must not exceed $150 for individual coverage or $300 for family coverage.

Additionally, DPCA membership fees are now considered HSA-eligible expenses. These provisions apply beginning January 1, 2026.

Dependent Care FSA Limits Increased

Beginning January 1, 2026, the annual limit for Dependent Care FSAs will increase from $5,000 to $7,500 ($2,500 to $3,750 for married individuals filing separately). These limits are not indexed for inflation.

Student Loan Payment Assistance

The OBBB permanently extends the ability for employers to use qualified educational assistance programs to help employees pay their student loans on a tax-free basis – up to a maximum of $5,250 annually. Originally implemented in 2020 under the CARES Act, this option was scheduled to expire December 31, 2025.

Additionally, the annual limit will now be indexed for inflation beginning after 2026.

Client Actions

• Work with legal counsel and other service providers to evaluate required and optional changes that may need to be implemented. Changes may require a Summary of Material Modifications (SMM) be provided to participants.
• Update employee communications, plan documents, processes, and systems as needed.
• Plan sponsors choosing to apply the telehealth relief retroactively should consult with their carriers to determine how to handle telehealth claims previously paid by employees out of pocket.
• Plan sponsors adopting the new dependent care limits should assess potential impacts on nondiscrimination testing.

Please contact your Piper Jordan client team with any questions or for additional support.