How the One Big Beautiful Bill Act Could Reshape Benefits and Insurance

The One Big Beautiful Bill Act (OBBBA) – a comprehensive reconciliation bill that encompasses budgetary provisions related to the border, defense, energy policy, spending cuts, the debt ceiling, taxes, and more – has been signed into law by President Trump as of July 4, 2025.

The bill includes significant potential changes that are likely to impact how employers structure benefits, how individuals access coverage, and how insurance products are taxed and delivered.

Here’s what employers need to know now that the OBBBA is law.

ACA and Medicaid: Coverage Losses

The bill reduces Medicaid and Affordable Care Act (ACA) subsidies, which are likely to increase the uninsured rate and affect workforce health and productivity.

The Congressional Budget Office (CBO) estimates the bill will result in more than 11 million people losing coverage due to Medicaid and ACA cuts and an additional 4 million losing coverage from expiring Obamacare subsidies.

As a result, more employees may turn to employer-sponsored coverage, increasing benefits plan enrollment and potential claims exposure – especially for organizations with a high number of low-wage workers.

Employee Benefits Provisions

It’s also important for employers to take note of the benefits-related provisions included in the bill.

• Telehealth can now permanently be offered without jeopardizing HSA eligibility, even if telehealth services are covered prior to satisfying the HSA minimum statutory deductible. This provision is effective retroactive to Jan. 1, 2025.
• Beginning Jan. 1, 2026, individuals may receive medical care consisting solely of primary care services – provided by primary care practitioners – through a direct primary care service arrangement without jeopardizing HSA eligibility.
  • 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 fee for direct primary care service arrangements, for an individual for any month, shall not exceed $150, or $300 for family coverage, subject to a cost-of-living adjustment.
  • In addition, the law defines marketplace bronze and silver level coverages as HSA compatible.
• Dependent care assistance amounts available through a Code Section 129 dependent care assistance plan are increased to $7,500 – up from $5,000 – and $3,750 – up from $2,500 – for married couples filing separately. This becomes effective for tax years beginning after Dec. 31, 2025. Notably, these amounts are not tied to a cost-of-living adjustment.
• The CARES Act allows educational assistance plans to cover qualified student loan repayment. This provision, which was set to expire Dec. 31, 2025, is made permanent by the OBBBA. Further, the $5,250 educational assistance dollar amount will be tied to a cost-of-living adjustment beginning Jan. 1, 2026.
• The law also establishes an IRA-type savings account, specifically for children, beginning Jan. 1, 2026. This account would allow the taxpayer and others to contribute up to $5,000, tied to cost-of-living adjustments annually, and up to $2,500 of that amount could be contributed by an employer. Additionally, the government will contribute $1,000 for children born between 2025 and 2028.

Insurance Impacts: Emerging Pressures for Households

The bill may also influence personal insurance coverage through broader economic and policy shifts:

• Climate Change: As natural disasters become more frequent and severe, insurers are already tightening underwriting standards – and the bill’s broader impact on federal programs may accelerate that trend. Homeowners in wildfire zones, floodplains, and hurricane-prone regions may struggle to find affordable coverage, if any at all.
• Inflation: Persistent inflation continues to drive up the cost of construction materials, vehicle parts, and labor. If the bill’s economic policies contribute to further inflationary pressure, homeowners and auto insurance premiums could rise significantly.
• Tax Cuts and Incentives: Reductions in public assistance programs, such as Medicaid and Supplemental Nutrition Assistance Program (SNAP), could have broader financial consequences for lower-income households. If individuals need to reallocate limited resources to healthcare or basic needs, personal insurance premiums may be one of the first spending categories to fall by the wayside – increasing the risk of coverage lapses.
• Tech-Driven Underwriting: Insurers are using more advanced data tools, which can improve pricing accuracy but also result in higher premiums or coverage denials for some consumers.

Now that the OBBBA has been signed into law, employers offering voluntary coverage for personal lines should prepare for increased questions, more dynamic risk profiles, and the need for targeted financial wellness support.

Preparing for What’s Next

The OBBBA reflects emerging policy trends that center around personalization, portability, and proactive incentives for employers to offer more flexible benefits. 

A strategic partner can help employers assess their current benefits strategies, model financial impacts, and prepare for what’s ahead now that the OBBBA is finalized. Connect with our team at CBIZ today to get started.