2025 Compliance Year in Review

January 2026

Daniel Finnegan, Compliance Specialist

Several regulatory changes and updates occurred last year in connection with the One Big Beautiful Bill Act (“OBBBA”) as well as significant agency non-enforcement policies implemented in connection with the transition to a new administration in Washington, DC last January.

The One Big Beautiful Bill Act Updates:

• Health Savings Account (“HSA”) telehealth flexibility permanently extended
  High-Deductible Health Plans (“HDHPs”) can cover telehealth and other remote care services below the deductible of HSA compatible HDHPs on a permanent basis. OBBBA made this relief effective retroactively for plan years beginning on or after December 31, 2024. This was welcome relief for employers sponsoring HSA compatible HDHPs.
• Direct primary care (“DPC”) below HSA deductible
  DPC, as defined under OBBBA, is considered HSA compatible coverage and DPC fees, up to OBBBA limits of $150/month or $300/month for family coverage, can be reimbursed by HSAs. These DPC arrangements cannot cover procedures that require the use of general anesthesia, prescription drugs (other than vaccines), or laboratory services not typically administered in a primary care setting. Given these restrictions on plan design, the benefit of this change is uncertain.
• Tax favored employer student loan repayment
  COVID relief allowed tax favored employer student loan repayment up to the tuition assistance limit. This relief was set to expire December 31, 2025. However, OBBBA made the $5,250 income exclusion for employer student loan repayments permanent. Note that this is a combined limit and includes any employer funding for educational assistance programs.
• Dependent Care Assistance Program (“DCAP”) limits increased
  The income exclusion limit for DCAPs (or other employer provided childcare) has increased from $5,000 ($2,500 for married filing separately) to $7,500 ($3,750 for married filing separately) for 2026. Plans with a history of failing non-discrimination testing should consider capping the elections of highly compensated employees (“HCEs”).

Compliance updates and reminders:

• On June 27, 2025, the U.S. Supreme Court upheld the Affordable Care Act’s (“ACA”) preventive care coverage mandate (Health and Human Services, et al. v. Braidwood Management, Inc., et al.,). Group health plans should continue to comply with these longstanding rules.
• The Departments of Labor, Treasury, and Health and Human Services (“Departments”) issued non-enforcement policies regarding:
  • The 2024 Mental Health Parity Addiction Equity Act (“MHPAEA”) final rule (see Notice of MHPAEA nonenforcement).
  • The 2024 Section 1557 final rule (see Section 1557: Protecting Individuals Against Sex Discrimination).
• These non-enforcement policies are welcome news for group health plan sponsors due to the complexity of compliance. However, plan sponsors should continue to work with insurance companies and Third-Party Administrators (“TPAs”) on compliance with MHPAEA.
• The Departments also withdrew 2024 proposed amendments to the HIPAA Security Rule. Because these were proposed rules, there are no employer action items.
• On June 18, 2025, the U.S. District Court for the Northern District of Texas issued an order vacating final HIPAA Privacy Rule amendments regarding Reproductive Health information. Amendments to the Notice of Privacy Practices (“NPP”) are still required to reflect new restrictions on the use and disclosure of substance use disorder information.

Employer Action Items

• Review telehealth arrangements: Reach out to insurance companies and TPAs about adding or extending telehealth for HSA compatible HDHPs.

• Explore DPC options: If interested in adding DPC, partnering with a vendor that understands OBBBA rules is key. Work with your Baldwin Group team to explore compliant options.

• Connect with cafeteria plan administrators on DCAP limits: Connect with section 125 administrators to discuss whether it is viable to increase DCAP limits and pass non-discrimination testing. Amend plans to increase limits, if appropriate.

• Revisit student loan repayment plan options: Look at whether adding (or extending) a student loan repayment plan would be beneficial to recruiting and retaining valued employees.

• Coordinate with vendor partners on MHPAEA compliance: Connect with insurance companies, TPAs, and vendors to ensure general MHPAEA compliance, including their ability to support or provide a written NQTL comparative analysis in the event of an audit.
• Amend HIPAA NPP: Amend NPP by February 16, 2026, or confirm that amendments have been made by vendor partners.