Major changes to employer-sponsored benefit plans could be on the horizon. On May 22, 2025, the House of Representatives narrowly passed the proposed “One Big Beautiful Bill” (OBBB), a wide-reaching budget reconciliation package aligned with President Trump’s economic agenda. While the bill still faces negotiations in the Senate and is far from finalized, its provisions—if enacted—could significantly reshape employer benefit strategies, particularly around HSAs, ACA exchanges, and CHOICE Arrangements (formerly known as ICHRAs).
While nothing in the bill is final, the House version gives us an early window into potential policy shifts that employers may want to monitor closely. This summary outlines the current proposals and suggests steps employers can take to stay informed—not to predict outcomes.
A Proposed Boost to HSAs (Starting 2026)
The House-passed bill includes proposed enhancements to Health Savings Accounts, such as:
- Nearly doubling contribution limits (~$10,000 individual / ~$20,000 family, based on income)
- Allowing Medicare-eligible individuals and spouses in FSAs to contribute
- Expanding HSA-eligible plans to include Bronze ACA plans and direct primary care arrangements
- Recognizing gym memberships, fitness programs, and certain pre-deductible costs as eligible expenses
- Permitting spousal catch-up contributions into one account
- Allowing certain FSA/HRA rollovers into HSAs
If enacted, these provisions would significantly expand HSA flexibility and eligibility, with potential implications for plan design, employee engagement, and communication strategies. Employers offering high-deductible health plans may need to reexamine how they position HSAs as part of their overall benefits package—especially as employees gain new ways to use these accounts.
Our take: Now is the time to review your HSA offerings and plan designs—especially if your workforce trends toward younger employees, high-deductible plan adoption, or consumer-driven healthcare behaviors. Consider how expanded HSA capabilities could change employee expectations, and whether your current strategy aligns with where benefits are heading. Even though changes aren’t final, early planning ensures you’re not caught off guard.
Bottom line: If your organization doesn’t offer an HSA-compatible plan, employees may start asking why. If you already do, the value proposition could become even stronger—if these changes pass.
ACA Exchange Tightening: Could Employees Shift Back to Employer Plans?
The bill proposes several changes to how individuals access coverage on the ACA marketplace:
- Shortened open enrollment periods
- Stricter income verification requirements
- Removal of automatic re-enrollment options
- Restricted access for DACA recipients
If enacted, these changes could lead more employees to rely on employer-sponsored coverage—especially those who previously turned to the individual exchange for affordability or convenience. Employers may see shifts in plan enrollment, cost exposure, or subsidy eligibility.
Our take: Employers should begin modeling how their plan population might shift under these proposed changes—particularly those with a large number of part-time, seasonal, or hourly employees. Think about the financial impact of increased enrollment, potential changes to contribution structures, and how your benefits communications might need to adapt. Understanding your employee population now will help you respond quickly if the bill advances.
CHOICE Arrangements (ICHRA): Codified and Incentivized—But Not Always the Right Fit
The bill proposes formal codification and renaming of Individual Coverage HRAs (ICHRAs) as CHOICE Arrangements. Several incentives are included:
- Small business tax credit: First-time adopters with fewer than 50 employees may qualify for up to $100 per employee/month in year one, and $50 in year two
- Eligibility alignment: Bronze and Catastrophic exchange plans would be HSA-eligible; Silver-tier plans would regain value with the return of cost-sharing reduction (CSR) payments
- Compliance implications: Changes to exchange eligibility (particularly for DACA recipients) may require careful monitoring
While these proposals aim to increase flexibility, CHOICE Arrangements may not be the right solution for all employers. They require complex substantiation, ongoing communication, and often shift more cost and responsibility to employees when not designed carefully.
Our take: If you’ve considered CHOICE (ICHRA) models in the past—or dismissed them—it’s worth taking a second look through a strategic lens. For some organizations, particularly those struggling with affordability or dispersed employee populations, they may serve a purpose. For others, the administrative burden and potential employee dissatisfaction may outweigh the benefit. Don’t assume a tax credit means it’s the right move. Use this time to evaluate how well your current benefits structure supports your long-term goals and employee needs.
PBM Reform: Transparency on the Horizon
The OBBB includes proposed transparency mandates for pharmacy benefit managers (PBMs) under Medicare:
- Spread pricing would be banned
- Transparency reporting would be required
While these provisions currently apply only to Medicare, they point to a broader trend. Increased scrutiny of drug pricing could eventually affect employer-sponsored commercial plans.
Our take: This may be the early signal for more aggressive transparency requirements across the healthcare space. Employers should begin asking questions of their brokers or PBM partners: What does our spread pricing look like? What level of transparency do we have today? Understanding your pharmacy cost drivers now will put you in a stronger position if broader reform takes hold.
Medicaid and Immigration Provisions: Watch for Downstream Effects
Additional provisions in the proposed bill include:
- Imposing Medicaid work requirements
- Eliminating exchange access and premium tax credits for undocumented immigrants (including DACA recipients)
- Restricting federal funding for gender transition procedures
Though these changes primarily target public programs, they may increase reliance on employer-sponsored health plans, particularly in industries with larger populations of low-wage, part-time, or immigrant workers.
Our take: If your business model depends on a workforce that may be impacted by these eligibility changes, start reviewing your plan access policies, enrollment rates, and potential capacity for coverage expansion. Employers in industries like hospitality, food service, healthcare, or manufacturing may experience enrollment spikes or increased pressure to offer lower-cost options. Preparation now may help you avoid difficult trade-offs later.
What’s Next—and What Employers Can Do Now
The proposed bill now heads to the Senate, where debate and potential revisions are expected throughout the summer. Nothing is finalized, and the final outcome may look very different from the current House-passed version.
Action Items for Employers
- Reevaluate your HSA and CHOICE (ICHRA) offerings—if applicable
- Prepare for potential plan population shifts
- Educate employees on possible benefit eligibility impacts
- Review current cost structures and vendor transparency
- Work closely with your broker or consultant to stay proactive—not reactive
At 1RDG, we’re keeping a close eye on developments as they unfold. While we can’t predict the final version of the bill, we can help you assess how the proposed changes could affect your strategy—and ensure you’re prepared for whatever comes next.
Let’s talk.