Congress Passes Major Healthcare Benefits Expansion: What Employers Need to Know

Congress has officially passed the One Big Beautiful Bill Act, ushering in the most significant enhancements to Health Savings Accounts (HSAs) in over two decades. With the bill now headed to President Trump for his signature, employers and plan sponsors should begin preparing for changes that will reshape benefit strategies beginning as early as 2026.

Major HSA Changes Employers Should Prepare For:

1. ACA Bronze and Catastrophic Plans Now HSA-Compatible (Effective 2026)
Starting January 1, 2026, individuals enrolled in Bronze or Catastrophic ACA marketplace plans will be eligible to use Health Savings Accounts. Previously, technical limitations made most of these high-deductible plans incompatible with HSAs—even though they carry significant out-of-pocket costs. This change opens the door for over 7 million Americans to benefit from tax-advantaged savings.

2. Direct Primary Care (DPC) Now Eligible for HSA Funding (Effective 2026)
Employers may now offer Direct Primary Care memberships without impacting HSA eligibility. DPC fees (up to $150/month for individuals or $300 for families) can be paid using HSA funds, and these arrangements are no longer considered disqualifying health plans. This change supports a growing healthcare model focused on direct access to primary care.

3. Permanent Pre-Deductible Telemedicine Coverage (Retroactive to 2025)
Plans can now permanently cover telemedicine services before the deductible is met—without affecting HSA compatibility. Employers who previously paused this benefit due to regulatory uncertainty may now reinstate it, aligning with plan documents retroactively for plan years starting after December 31, 2024.

These provisions not only expand access but also offer new plan design flexibility—building on 2019 regulatory guidance that enabled coverage for certain chronic condition treatments. It’s a clear sign that lawmakers recognize the value of HSAs in helping Americans manage rising healthcare costs.

Dependent Care FSA Limit Increased

Also included in the bill: an increase in the dependent care Flexible Spending Account (FSA) contribution limit from $5,000 to $7,500, effective in 2026. For married individuals filing separately, the limit increases from $2,500 to $3,750. This long-overdue update—the first permanent increase since 1986—provides added tax savings for working families managing childcare expenses.

Action Items for Employers and Plan Sponsors:

• Review and Update ICHRA Materials
  Inform employees that ACA Bronze and Catastrophic plans will be HSA-compatible starting in 2026.
  
• Consider Offering Direct Primary Care (DPC)
  With DPC now HSA-eligible, employers may find it an appealing, cost-effective benefit to offer.
  
• Reinstate or Align Telemedicine Coverage
  Employers offering high-deductible health plans can confidently provide pre-deductible telemedicine services again.
  
• Prepare for FSA Limit Increases
  Update plan documents, payroll systems, and employee communications to reflect the 2026 increase in dependent care FSA contributions.
  

At MBA Administrators, we are continuously monitoring legislative changes to help our clients remain compliant and competitive. If you have questions about how this new law impacts your self-funded plan, reach out today.

Let’s talk about how we can help you prepare for 2026. Schedule a consultation.