What the 2025 tax law changed for employer health and welfare benefits
The One Big Beautiful Bill Act, enacted July 4, 2025, changed rules for HDHP telehealth, direct primary care, HSA eligibility, dependent care accounts and student loan repayment benefits. Here is what applies to employers and when.
Five changes employers should know about.
Telehealth Before the Deductible, Made Permanent
An HDHP may cover telehealth and remote care before the deductible without losing HSA eligibility, for plan years beginning after 2024.
Direct Primary Care and HSAs
Starting in 2026, a qualifying direct primary care arrangement no longer blocks HSA contributions if monthly fees stay within the limit.
Bronze and Catastrophic Plans With HSAs
For months beginning in 2026, certain exchange bronze and catastrophic plans count as HDHPs, which opens HSA eligibility to those enrollees.
Dependent Care FSA Limit Raised
The annual exclusion for dependent care assistance rises to $7,500 for taxable years beginning after 2025.
Student Loan Repayment Benefits
Employer payments toward employees’ student loans under Section 127 no longer end after 2025, and the $5,250 cap is indexed after 2026.
Plan Documents and Employee Notices
Each change needs a decision, a plan amendment where applicable, and a clear note to employees before open enrollment.
Questions about the 2025 law and your benefits.
Plain answers for HR, finance and deal teams.
What Is the One Big Beautiful Bill Act?
A 2025 federal law, Public Law 119-21, that changed several tax rules affecting employer benefits, among many other topics.
Do HDHPs Have to Cover Telehealth Before the Deductible?
No. The law lets a plan do so without affecting HSA eligibility, but it does not require it. This applies to plan years beginning after December 31, 2024.
What Is a Direct Primary Care Arrangement?
A fixed periodic fee for primary care services. IRS Notice 2026-5 sets the limit at $150 a month for an individual and $300 a month for more than one person, for months after 2025.
What Happens if the Fee Is Over the Limit?
The person becomes ineligible to make HSA contributions while enrolled, according to the IRS notice.
Are Bronze Plans Now HSA-Eligible?
Bronze and catastrophic plans offered as individual coverage through an Exchange are treated as HDHPs for months beginning after 2025. Bronze plans sold as small-employer group coverage generally do not qualify.
What Is the New Dependent Care FSA Limit?
$7,500, or $3,750 for a married person filing separately, for taxable years beginning after December 31, 2025. Check your plan document, because the plan sets its own cap.
Did the Law Change Student Loan Repayment Benefits?
The Section 127 provision that allowed employers to pay student loans now has no end date for payments after 2025, and the $5,250 cap is indexed for taxable years after 2026.
Do We Need to Amend Our Plans?
Some changes may call for plan amendments or updated documents. Your counsel or plan document provider confirms which apply.
How Should We Tell Employees?
With a short note before open enrollment explaining what changed and what it means for their elections.
Where Do We Start?
Send us your current plan summaries. We will show which of these changes touch your plans and what to update first.
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General information about the 2025 tax law and employee benefits, not legal or tax advice. Plan-specific questions belong with your counsel and tax advisor, and we will bring them in.
The Tax Law Behind These Changes.
The laws named on this page link to the statute or regulation they come from. This is general information, not legal advice, and rules change, so check the current text and ask your counsel.
Expanded Availability of HSAs (IRS Notice 2026-5)
IRS guidance on the 2025 law changes that expand who can use health savings accounts.
Dependent Care Assistance (26 U.S.C. 129)
The tax code section for employer dependent care assistance programs.
Educational Assistance (26 U.S.C. 127)
The tax code section for employer educational assistance programs.
Related reading on benefit limits and open enrollment.
Benefit Limits Overview
The page this belongs to.
Employer Compliance Guide
The full section.
Open Enrollment Checklist for 2027
What to do before the new plan year.
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