The President signed the One Big Beautiful Bill Act (OBBBA), H.R. 1, into law on July 4, 2025. While only a small portion of the overall law, the OBBBA does contain several provisions affecting employer-provided health and welfare and other fringe benefits. Employers and/or employees will welcome most of the changes.
Congress used the budget reconciliation process to make it easier to pass the legislation, which is why all of the employee benefits provisions are tax related. The benefits-related provisions in the final version of the law changed significantly from the earlier bill passed by the U.S. House of Representatives, so the items discussed in this alert may differ from content summarizing the OBBBA that you read in May or June.
Our alert addresses the provisions in the law related (directly or indirectly) to employer-provided health and welfare and other fringe benefits, considerations to aid employers with any necessary decision making, and employer action items for adopting and/or implementing any changes. It does not address the OBBBA’s tax cuts, changes to the taxation of certain wages (e.g., tips and overtime), what effect changes to Medicaid might have on access to health care providers, or the Trump Account pilot program.
