One Big Beautiful Bill Includes Employee Benefits Provisions: 

On July 4, President Trump signed into law the One Big Beautiful Bill (the “Bill”), in all its roughly 900 pages of star-spangled glory. The Bill covers a wide array of areas (e.g., health care, national defense, and energy policies), but it also includes employee benefits provisions. Those provisions address topics such as health savings accounts, health insurance marketplaces, executive compensation, and family and medical leave. Given that The Speed Reader’s focus is on retirement plans, those provisions are beyond this article’s scope.

However, certain employee benefits provisions in the Bill will result in a lower amount of taxable income for many employees. That will affect employers’ payroll systems and tax reporting, which will likely affect many plans’ definitions of “Compensation” (or a similar term). It is critical that a plan’s definition of “Compensation” is interpreted carefully, because it is used to calculate employees’ and employers’ plan contributions. In this connection:

• Dependent Care Flexible Spending Accounts:  For 2026, the dependent care flexible spending account limit will increase from $5,000 to $7,500 ($3,750 for married couples filing separately). 
• Student Loan Repayment Assistance:  Prior law provided that employers could pay for, or reimburse, up to $5,250 of an employee’s student loans on a tax-free basis from March 27, 2020 until the end of 2025. The Bill makes permanent that option for employers that wish to provide employees with student loan repayment assistance.     
• Trump Accounts:  These accounts are essentially treated like traditional IRAs in that contributions will grow on a tax-deferred basis, but these accounts are only for children under age 18. Employers can elect to contribute up to $2,500 annually (adjusted for inflation) to Trump Accounts of an employee or any of his or her dependents. If an employer does so, it has to adopt a plan document that includes certain provisions. These accounts will be available as of January 1, 2026.  
• Moving Expenses:  For tax years beginning after December 31, 2025, the Bill ends the deduction for moving expenses, as well as the exclusion for employer-provided moving expense reimbursements (except for certain members of the military and intelligence communities).