Benefits Monthly Minute
The July Monthly Minute highlights several benefits provisions under the One Big Beautiful Bill Act and offers reminders about upcoming PCORI and Form 5500 deadlines.
Many Benefits, One Big Beautiful Bill
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA). Touted as a “one-in-a-generation” piece of legislation, the OBBBA not only sets forth tax cuts for tips and overtime, it also includes several benefits-related provisions, as summarized below:
- For plan years beginning after December 31, 2024, high deductible health plans (HDHPs) may offer first dollar coverage for telehealth and other remote care services.
- Effective January 1, 2026, certain direct primary care (DPC) service arrangements will be compatible with health savings accounts (HSAs) and DPC expenses will be considered reimbursable medical expenses under an HSA. Such DPC arrangements must be for primary care services and subject to a certain (inflation adjusted) monthly fee. Procedures that require the use of general anesthesia are excluded, as well as prescription drugs and certain lab services.
- Effective January 1, 2026, bronze and catastrophic plans offered on the Exchange will be considered HSA-compatible HDHPs.
- For tax years after December 31, 2025, the dependent care (DC) flexible spending account (FSA) exclusion limit is raised to $7,500 (from $5,000).
- Employers may contribute up to $5,250 tax free towards an employee’s student loan repayment under IRC 127, and the limit will be indexed for inflation in later years.
KMK Comment: The OBBBA permanently (and retroactively) prevents first dollar telehealth coverage from being a barrier to HSA eligibility, expands HSA access to those utilizing certain DPC service arrangements and those enrolled in bronze and catastrophic plans, and increases DC FSA exclusion limit. These tax-friendly provisions will likely be popular with employers and employees alike. And, in addition to extending COVID-era HSA-related legislation, the OBBBA makes permanent the CARES Act amendment to IRC 127 that had temporarily permitted tax-free employer contributions towards student loan repayments. More details about these changes may be issued by the IRS in the future. Plan administrators should work closely with counsel and service providers to ensure plan documents and employee communications reflect all applicable updates.
ALERT: PCORI & FORM 5500 DEADLINES
As a reminder, the following key benefit deadlines occur this month:
- PCORI (Patient-Centered Outcomes Research Institute) fees are reported and paid annually using Form 720. The fees are paid by health insurers and plan sponsors of self-insured plans. The PCORI filing and payment deadline for plan years ending in 2024 is July 31, 2025.
- Form 5500 filing deadline for calendar year plans ending December 31, 2024, is July 31, 2025. A 2 ½ month extension is available if requested/filed by July 31. Only limited exceptions apply to the Form 5500 filing requirement, and most large employers will be required to file in connection with their health and/or retirement plans.
KMK Comment: Late filings and/or delayed payments are all too common and result in unnecessary fees and compliance failures. Be sure to adhere to these important deadlines and work with counsel to facilitate accurate and timely filings.
The KMK Law Employee Benefits & Executive Compensation Group is available to assist with these and other issues.
Lisa Wintersheimer Michel
513.579.6462
lmichel@kmklaw.com
John F. Meisenhelder
513.579.6914
jmeisenhelder@kmklaw.com
Antoinette L. Schindel
513.579.6473
aschindel@kmklaw.com
Kelly E. MacDonald
513.579.6409
kmacdonald@kmklaw.com
Rachel M. Pappenfus
513.579.6492
rpappenfus@kmklaw.com
KMK Employee Benefits and Executive Compensation email updates are intended to bring attention to benefits and executive compensation issues and developments in the law and are not intended as legal advice for any particular client or any particular situation. Please consult with counsel of your choice regarding any specific questions you may have.
