Big Changes in Health & Benefits: What the New Reconciliation Act Means for Your Team

On July 3, 2025, Congress passed a sweeping benefits package known as the Reconciliation Act. While the name may sound dry, the changes packed into this legislation are anything but—and they could bring some big wins for your employees and your bottom line.

At Southern Benefit Group, our mission has always been to help our clients make smart, values-driven choices around employee benefits. Here’s a breakdown of the key updates from this new law—and how they might positively impact your benefit strategy going forward.

HSA Rules Just Got More Flexible

1. Telehealth Services – Now HSA-Friendly, Permanently

During the pandemic, temporary rules allowed high-deductible health plans (HDHPs) to offer telehealth visits with no out-of-pocket cost—without messing up employees’ eligibility for Health Savings Accounts (HSAs). Thanks to the Reconciliation Act, that flexibility is now permanent and retroactively effective starting with plan years after December 31, 2024.

👉 If you want to offer no-cost virtual care options, you can now do so without jeopardizing HSA eligibility for your team.

2. Direct Primary Care Memberships Now HSA-Compatible

Starting in January 2026, employees can sign up for a direct primary care (DPC) arrangement—a flat monthly fee to see a trusted doctor as often as needed—and still keep their HSA eligibility, as long as:

• The fee doesn’t exceed $150/month for one person or $300/month for family coverage
• The arrangement doesn’t include surgeries with general anesthesia, prescriptions (except vaccines), or non-routine lab work

Even better? These fees can be paid tax-free from the HSA.

If you're exploring personalized healthcare options that reflect the values of care, community, and stewardship—this could be a great fit. 

3. More Health Plan Choices Qualify for HSAs

Also beginning January 2026, all bronze and catastrophic plans sold on the health insurance exchange will be considered HSA-eligible, even if they don’t fully meet traditional HDHP standards.

That means more affordable, flexible options for individuals and families, and more room for employers to design cost-effective benefit plans that meet people where they are.

Dependent Care FSA Limit Increased

The maximum tax-free contribution to a Dependent Care Assistance Plan (DCAP) will rise in 2026:

• From $5,000 → $7,500 for single filers and married couples filing jointly
• From $2,500 → $3,750 for married individuals filing separately

If you're helping employees manage the rising cost of child care or elder care, this is a great opportunity to update your cafeteria plan and offer real, practical support.

Student Loan Repayment – Tax-Free, Long-Term

Good news for younger employees or those still tackling college debt:
The Reconciliation Act makes it permanently tax-free for employers to contribute up to $5,250 per year toward an employee’s student loans.

This rule was originally temporary pandemic relief—but it’s here to stay, and the annual limit will now adjust for inflation after 2026.

Employers must set up a formal Educational Assistance Program and notify eligible employees of the opportunity. At Southern Benefit Group, we can walk you through the process of setting one up quickly and compliantly.

Need Help Adapting Your Benefits?

This new law opens the door to more flexibility, more savings, and more strategic choices—but it also means updating your plans and documentation to stay compliant.

At Southern Benefit Group, we’ve been serving businesses like yours since 2002, with a deep commitment to integrity, service, and finding benefit solutions that put your people first. If you’re ready to adapt your benefits to align with these updates, we’re here to guide you every step of the way.