President Trump signed H.R. 1, the "One Big Beautiful Bill Act," on July 4, 2025, after the Senate passed its version on July 1 and the House agreed to it on July 3. It's now Public Law 119-21. The law is enormous, but only a handful of provisions touch employer health benefits directly. Here's what brokers need to know, starting with the question we've heard most.
The CHOICE arrangement provisions didn't make it
The House-passed bill would have codified ICHRA as the "CHOICE arrangement," created a small-employer tax credit, and allowed cafeteria plans to pay for Exchange coverage (we covered those sections in June). None of those provisions are in the final law.
That means:
- ICHRA continues to operate under the 2019 regulations. Nothing about classes, minimum class sizes, the 90-day notice, substantiation, or affordability has changed.
- There's no new ICHRA tax credit for small employers.
- Cafeteria plans still can't be used to pay for individual coverage purchased through an Exchange. Employees who want pre-tax salary reductions for the portion of the premium their ICHRA doesn't cover still need to buy off-Exchange coverage.
If you told clients the codification "might happen," now is a good time to close the loop. The ICHRA they can offer today is the same one they could offer last year.
HSA changes that matter to employers
Telehealth safe harbor is permanent (section 71306)
A high deductible health plan can once again cover telehealth and other remote care before the deductible without disqualifying participants from HSA contributions. The relief had lapsed for plan years beginning in 2025; the law makes it permanent for plan years beginning after December 31, 2024. Calendar-year plans that dropped first-dollar telehealth for 2025 can consider restoring it.
Bronze and catastrophic Exchange plans count as HDHPs (section 71307)
Starting with months beginning after December 31, 2025, bronze and catastrophic plans available as individual coverage through an Exchange are treated as high deductible health plans for HSA purposes.
This has a direct ICHRA angle. An employee who uses an ICHRA allowance to buy a qualifying bronze plan may be able to contribute to an HSA in 2026, as long as they don't have other disqualifying coverage. One important caveat: an ICHRA that reimburses medical expenses beyond premiums can itself be disqualifying coverage for HSA purposes. Employers who want to preserve HSA eligibility should look closely at whether their ICHRA is premium-only. Expect IRS guidance on the details.
Direct primary care works with HSAs (section 71308)
Beginning in 2026, a direct primary care arrangement with fees of no more than $150 per month for an individual ($300 if it covers more than one person) isn't treated as disqualifying coverage, and HSA funds can pay the fees. Prescription drugs (other than vaccines), procedures requiring general anesthesia, and certain lab services are excluded from what counts as primary care.
Dependent care and other workforce benefits
- Dependent care assistance (section 70404). The annual exclusion rises from $5,000 to $7,500 ($3,750 for married filing separately) for taxable years beginning after December 31, 2025. It isn't indexed for inflation. Employers who sponsor a dependent care FSA need to decide whether to adopt the higher limit for 2026 and amend their cafeteria plan documents accordingly.
- Employer-provided child care credit (section 70401). The section 45F credit increases to 40% of qualified expenses (50% for eligible small businesses), with a maximum credit of $500,000 ($600,000 for eligible small businesses), starting in 2026.
- Student loan repayment (section 70412). Tax-free employer payments of student loans under an educational assistance program, previously set to expire after 2025, are now permanent. The $5,250 limit will be indexed for inflation after 2026.
What the law didn't do
The law does not extend the enhanced premium tax credits that have been in place since 2021. Under current law, those enhancements expire after December 31, 2025. The law also makes other changes to the premium tax credit, including eliminating the cap on how much excess advance credit people must repay, starting with 2026 tax years.
For employers, this matters in two ways:
- ICHRA employees and opt-outs. Employees whose ICHRA is unaffordable can choose to waive it and claim a premium tax credit. With smaller credits in 2026, that choice may look less attractive.
- Individual market premiums. Insurers filing 2026 rates are already factoring in the expiration. Expect larger increases on renewal notices this fall, which affects both ICHRA allowances and employees who buy their own coverage.
Action items for brokers
- Tell ICHRA clients nothing changed in the rules, and keep 2026 notices on the 90-day timeline.
- Review HSA strategy for 2026, including whether a premium-only ICHRA paired with bronze plans makes sense for some clients.
- Flag dependent care FSA limits before open enrollment materials go to print.
- Prepare clients for individual market rate increases as 2026 rate filings become public.
The final law turned out to be less dramatic for ICHRA than the House bill suggested, but the HSA changes give brokers new design options to bring to 2026 renewals.