The political landscape has seen significant developments in healthcare reform, notably with the enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025¹. This legislation introduces changes that may reshape healthcare policies, employee benefits, and overall benefits packages. Understanding these changes is crucial for employers to navigate the evolving landscape effectively¹,².

What Is the “Big Beautiful Bill”?

The “Big Beautiful Bill,” officially known as the One Big Beautiful Bill Act, is a substantial piece of legislation encompassing tax, spending, and healthcare provisions¹,³. The law focuses on deregulation of healthcare, expansion of private insurance options, tax incentives for both employers and employees, and modifications to certain provisions of the Affordable Care Act (ACA)¹,⁴. At its core, the law aims to increase competition and choice in healthcare, with the objective of reducing premiums and expanding access³.

How Will the Bill Impact Employee Benefits?

Changes to ACA Compliance

The OBBBA includes provisions that modify certain aspects of the ACA²,³. While the law does not eliminate the ACA, it introduces changes, such as new reporting requirements for certain Medicaid enrollees and restrictions on federal financial assistance for those enrolled in the ACA Marketplace². Employers offering health insurance may encounter fewer regulatory requirements around employee health plans but could face challenges if employees opt out of company-sponsored coverage due to more affordable individual insurance options or if employees lose government-sponsored coverage³.

Expansion of Health Savings Accounts (HSAs)

The law expands Health Savings Accounts (HSAs) by broadening the definition of a high-deductible health plan (HDHP) to include bronze and catastrophic plans²,³. This allows taxpayers to save and invest more money tax-free for healthcare expenses². For employers, these expanded accounts present an opportunity to provide more customizable healthcare benefits, potentially reducing administrative costs while empowering employees to manage healthcare expenses more effectively³. The OBBBA also designates Direct Primary Care arrangements as qualified medical expenses eligible for HSA coverage within limits².

Shift Toward Private Insurance

The legislation includes adjustments to Medicaid and changes to the ACA marketplace, which may result in fewer individuals relying on government-run plans²,³. This shift encourages employers to refine benefit packages to provide more personalized private insurance options that better align with employee needs³. Increased competition among private insurers may also influence employer-sponsored insurance premiums².

Tax Incentives for Employers

The OBBBA introduces new tax provisions, including a permanent increase to the standard deduction¹,². While healthcare-specific tax incentives for employers are not as clearly detailed as individual tax changes, the general focus on tax relief and cost reduction is intended to encourage companies to reassess benefit offerings and consider new ways to support employee health and well-being².

Potential Impact on Wellness Programs

The law’s emphasis on individual choice and competition may encourage employers to invest more in wellness programs²,³. Health and wellness incentives, such as gym memberships, mental health services, and preventative care, could become more prevalent as employers aim to improve employee health outcomes and reduce long-term healthcare costs³. These programs can also enhance employee engagement and satisfaction².

What Can Employers Do to Prepare?

Given the significant changes brought by the OBBBA, employers should remain informed and proactive. Key strategies include:

  1. Stay Updated on Legislation:
    Employers should regularly monitor updates on the law, particularly regarding ACA regulations, HSA contributions, and tax incentives²,³. Joining professional organizations or subscribing to policy newsletters can help employers stay current.
  2. Review Employee Benefits Packages:
    Employers should evaluate current healthcare offerings and consider adjustments to remain competitive and cost-effective, particularly with expanded HSAs and private insurance options²,³. Supplemental private plans or partnerships with brokers may help diversify options for employees².
  3. Communicate with Employees:
    Transparent communication is essential. Employers should educate employees on changes to benefits, HSAs, and wellness programs, and explain potential impacts on premiums or out-of-pocket costs²,³.
  4. Consult with Benefits Advisors and Legal Counsel:
    Navigating healthcare reform is complex. Consulting advisors and legal counsel ensures compliance and appropriate plan design under the new law²,³.
  5. Prepare for Tax Adjustments:
    Employers should reassess benefits strategies to maximize available tax incentives, adjust structures as necessary, and ensure overall compensation remains competitive¹,².

The Road Ahead for Employers

The One Big Beautiful Bill Act has introduced substantial transformations to the healthcare landscape¹,². Its impact on employee benefits is becoming clearer as provisions are implemented. Healthcare is likely to become more individualized, with greater responsibility falling on employers to navigate benefits packages effectively²,³. By staying informed, reassessing offerings, and planning proactively, employers can adapt to the evolving regulatory environment while continuing to support employee health and well-being²,³.

1Congress.gov. (2025). H.R.1 – One Big Beautiful Bill Act 119th Congress (2025-2026). https://www.congress.gov/bill/119th-congress/house-bill/1
2Ballard Spahr. (2025, July 14). The OBBBA’s impact on employee benefits and executive compensation. https://www.ballardspahr.com/insights/alerts-and-articles/2025/07/the-obbbas-impact-on-employee-benefits-and-executive-compensation
3McDermott Will & Emery. (2025, July 7). Employee benefits provisions of the One Big Beautiful Bill Act. https://vitacompanies.com/blog/employee-benefits-provisions-of-the-one-big-beautiful-bill-act
4Johns Hopkins Bloomberg School of Public Health. (2025, July 30). The changes coming to the ACA, Medicaid, and Medicare. https://publichealth.jhu.edu/2025/the-changes-coming-to-the-aca-medicaid-and-medicare