What CHROs Should Know About the Impact of the “Big Beautiful Bill”

The recently passed One Big Beautiful Bill Act introduces significant changes to regulations around employee benefits, employee tax treatment, and employer tax credit among other areas. For CHROs, these shifts – from expanded Paid Family & Medical Leave credits to changes in overtime eligibility and HSA usage – present both risks and opportunities. We sat down with Andrew Gallinaro, Partner at Fisher Phillips, to unpack the provisions expected to have the greatest impact on employers and what CHROs need to know now to turn policy shifts into strategic advantages. 

Family & Medical Leave Credit 

The Act permanently extends the federal paid family and medical leave tax credit, which was previously set to expire at the end of 2025. Importantly, it creates flexibility for employers by allowing them to claim the credit either as a percentage of wages paid to qualifying employees or based on the premiums paid for insurance policies covering paid family and medical leave. Finally, the definition of a qualifying employee was reduced to six months, expanding the number of eligible employees. 

Key takeaway: these changes increase optionality for employers and encourage them to offer paid leave benefits. While the overall impact remains uncertain, we anticipate broader adoption of paid leave as a strategic tool to attract and retain talent. 

Health Saving Accounts  

The Act expands HSA access and benefits. Telehealth relief will be permanent, allowing employees with an HSA and high-deductible health plan to receive telehealth services pre-deductible. Individuals will be permitted to use Direct Primary Care (DPC) and still contribute to an HSA. Additional plans available in the ACA Marketplace will be considered HDHPs – opening HSA access to many more people. 

Key takeaway: Overall, the HSA-related provision significantly expands accessibility, flexibility, and usability of HSAs. For employers, the changes enable employers to offer more creative, employee-friendly benefit packages.  

Qualified Overtime  

For companies with overtime eligible employees – like post-acute care and call center-centric healthcare services – changes to overtime compensation allows workers to deduct up to $12,500 of qualified overtime pay from their federal taxable income. The deduction applies only to the premium portion of overtime pay, as defined under Section 7 of the Fair Labor Standards Act.  

Key takeaway: When it comes to talent, these changes offer a meaningful after-tax benefit to employees. By staying proactive about communication and compliant with reporting requirements, employers can leverage these benefits to attract and retain talent.   

What CHROs should know? 

The One Big Beautiful Bill Act introduces a range of shifts that open the door for more employee-focused benefits strategies. For CHROs, these updates create opportunities to better support your workforce while strengthening your talent value proposition. The expansion of paid family and medical leave credits makes it easier to offer inclusive leave benefits; the updates to HSAs allow for more flexible and modern care models like telehealth and direct primary care; and the overtime deduction offers a meaningful financial benefit to frontline workers in high-overtime roles. 

Now is the time to evaluate your benefits mix, engage with your leadership teams, and determine how to use these changes not just to stay compliant—but to stand out in a competitive talent market.