How the Tax and Spending Bill May Affect Phillips 66 Employee Retirement Benefits

'In navigating the One Big Beautiful Bill Act, Phillips 66 employees must carefully consider how changes to Social Security, Medicaid, and Medicare, alongside expanded Health Savings Account benefits, may influence their financial and health care planning for retirement.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'In light of the One Big Beautiful Bill Act, Phillips 66 employees should remain vigilant about how shifts in tax provisions, Social Security taxation, and health care funding could reshape their retirement strategies and future financial stability.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

1. The tax provisions of the One Big Beautiful Bill Act and their potential impact on retirees, including Phillips 66 employees.

2. The proposed changes to Social Security, Medicare, Medicaid, and the implications for senior citizens.

3. The expansion of health savings accounts (HSAs) and the potential benefits for retirees in managing health care costs.

The One Big Beautiful Bill Act, a recent piece of legislation passed by the House of Representatives, has garnered attention due to its possible effects on retirees, including Phillips 66 employees. It includes a number of tax provisions that may have an influence on finances, including both large revisions and minor relief. Many older individuals are upset because the plan does not offer the expected tax benefits for Social Security recipients. The bill is now scheduled to proceed to the Senate, where it is anticipated to be amended before the President might sign it into law.

Although the plan provides a number of tax breaks, it overlooks the partial taxation of Social Security benefits, which is a problem that many older Americans, including Phillips 66 employees, believed would be resolved. Currently, depending on the recipient's income, federal income taxes may be applied to up to 85% of Social Security benefits. Reducing this tax burden would have been a significant win for retirees, but the reconciliation mechanism currently in place does not allow for such changes. This lack of Social Security assistance is significant, particularly for people who are approaching or have reached retirement and are largely dependent on these payments.

Notwithstanding this obstacle, the plan includes additional clauses that attempt to reduce older individuals' tax costs in various ways. The nonpartisan Congressional Budget Office (CBO) estimates that the bill's tax measures will raise the deficit by almost $3.8 trillion between 2026 and 2034, ¹  making its overall cost significant. The bill proposes to make large changes to Medicaid, which covers one in five Americans, including Phillips 66 employees, to balance these costs. Medicaid, which provides health care coverage to millions of older people, would be under pressure if funding were cut by around $700 billion between 2026 and 2034. ¹

Even though the law includes a number of significant tax reforms, higher-income households will benefit the most. According to an analysis by the Urban Institute and the Tax Policy Center at the Brookings Institution, by 2026, over 80% of households will see tax relief. ²  But over 60% of the total tax cuts would go to the wealthiest 20% of households, those making $217,000 or more, with a third going to those making $460,000 or more. ³  This highlights a significant issue for retirees: although some seniors, including those employed by Phillips 66, may get tax relief, it will mostly be available to those in higher income groups.

The law offers some assistance through an increased standard deduction for seniors, even if Social Security taxes remain unchanged. People 65 and older already receive a greater standard deduction under existing law, but the proposed measure raises it by an extra $4,000 between 2025 and 2028. Seniors who do not pay income taxes on their Social Security benefits because their combined income is less than the necessary thresholds—$32,000 for a married couple filing jointly or $25,000 for an individual—may benefit from this additional deduction. The benefit will not be available to everyone, though, as it begins to phase out for married couples with earnings over $150,000 or $75,000 for single filers, which will affect some Phillips 66 employees.

The bill's almost $500 billion in Medicare spending cuts, which the CBO projects will occur between 2027 and 2034, are another noteworthy feature. If the measure is approved as written, Medicare, which provides coverage to 69 million Americans 65 and older, including many Phillips 66 employees, may experience significant cuts. The precise effects of these cuts on benefits are still unknown, but they might worsen already-existing issues in the Medicare system, increasing beneficiaries' out-of-pocket expenses and possibly affecting the services they depend on.

Medicaid-related provisions are also included in the bill. The implementation of work requirements for Medicaid participants between the ages of 19 and 64 is a significant change. With certain exceptions, these recipients would have to work or engage in approved activities. This could be a major obstacle for those who struggle with age-related health difficulties, caregiving duties, or age discrimination in the workplace. Concerns have been expressed by the advocacy group Justice in Aging regarding the potential effects of these regulations on senior citizens, including those who may work at Phillips 66, especially those who are already having difficulty finding work.

The plan also suggests capping home equity to qualify for Medicaid. The proposed law would place a hard maximum of $1 million on home equity, although, currently, a person's house value can surpass a particular threshold without excluding them from Medicaid. Since this sum would not be updated for inflation, more people, including Phillips 66 employees, might eventually be ineligible to receive Medicaid long-term care benefits.

Changes that would affect nursing home care are also included in the law. The new bill would suspend a Biden-era rule that requires long-term care facilities to have a registered nurse on staff at all times. Advocates viewed this law as a way to improve the quality of care in assisted living facilities, but it has drawn criticism for perhaps driving up operating expenses for establishments already facing tight margins and staffing shortages, which could also affect seniors, including those connected to Phillips 66, relying on these services.

Last but not least, the plan proposes to reduce the Supplemental Nutrition Assistance Program (SNAP) by around $300 billion over the course of the next ten years. Many low-income seniors who depend on food assistance depend on SNAP, and these cuts may limit access to essential nourishment for those who are already at risk of financial hardship.

The One Big Beautiful Bill Act does not address the main issues that many retirees had anticipated would be resolved, even though it may provide some benefits to older folks, such as the increased standard deduction. For older Americans, especially those who largely rely on Medicare and Medicaid, the lack of adjustments to Social Security taxation combined with cuts to these programs poses serious issues. It's unclear what changes will be made to the bill once it passes the Senate and eventually reaches the President's desk. In the years to come, seniors, including those employed at Phillips 66, will need to be aware of and ready for the possible effects these laws may have on their health care and financial stability.

The bill's inclusion of a measure to increase the use of health savings accounts (HSAs) is an important consideration, even though it does not offer tax relief on Social Security income. The law permits those 65 and older to use HSAs for a broader range of costs beginning in 2025, including some over-the-counter drugs and previously uninsured medical services. This modification may provide seniors, including Phillips 66 retirees, with more tax-free ways to reduce their out-of-pocket medical expenses. The Congressional Research Service (2024) claims that this expansion can greatly lower retirement health care costs.

For retirees, the most recent tax reform measure creates conflicting outcomes. It offers many people tax relief by introducing an expanded standard deduction for those 65 and over, even though it does not remove taxes on Social Security income. Millions of elderly Americans' access to health care may be impacted by the bill's substantial cuts to Medicare and Medicaid. Seniors, including those associated with Phillips 66, will need to carefully plan their financial and health care strategies in light of the changes to Medicaid eligibility and long-term care, as well as the reductions in SNAP. 

Planning a road journey with a map that includes a few unanticipated detours is similar to navigating the most recent tax bill for retirees. There are some advantages to the journey, such as a bigger standard deduction to lessen the financial burden, even though the goal of removing Social Security taxes is off the route. The health care system may face difficulties due to changes to Medicare and Medicaid, and some Medicaid beneficiaries may find it more difficult to stay on track as a result of additional work requirements. Retirees who are familiar with the entire route, including Phillips 66 employees, can confidently plan their trip and know what modifications will be required along the way.

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Sources:

1. Congressional Budget Office. ' H.R. 1, One Big Beautiful Bill Act (Dynamic Estimate) .' 17 June 2025.

2. CBS News. ' How much wo uld Americans of different income save in taxes if the GOP bill is signed into law? ' by Aimee Picchi. 16 May 2025. 

3. Forbes. ' House Budget Bill Cuts Average Taxes By $2,900, Favors High-Income Households ,' by Howard Gleckman. 3 June 2025. 

Other resources:

1. Investopedia Staff. 'This Potential Policy Tweak Could Supercharge Your Health Savings in Retirement.'  Investopedia , 1 June 2025,  www.investopedia.com/this-quiet-policy-tweak-could-supercharge-your-health-savings-in-retirement-11744569 .

2. The Wall Street Journal Staff. 'Big Tax Breaks for Health Savings Accounts Get Even Better in the GOP Bill.'  The Wall Street Journal , 30 May 2025,  www.wsj.com/personal-finance/taxes/hsa-2025-changes-6d6314eb .

3. Taylor, Joy. 'Ask the Editor, May 30: Questions on the One Big Beautiful Bill.'  Kiplinger , 30 May 2025,  www.kiplinger.com/taxes/tax-law/ask-the-editor-may-30-one-big-beautiful-bill .

4. Kiplinger Staff. 'Four Changes to Medicare in the One Big Beautiful Bill Act.'  Kiplinger , 30 May 2025,  www.kiplinger.com/retirement/medicare/changes-to-medicare-in-the-one-big-beautiful-bill-act .

5. PBS NewsHour Staff. 'House Republicans Narrowly Passed Trump's 'Big, Beautiful' Bill: Here’s What’s In It.'  PBS NewsHour , 30 May 2025,  www.pbs.org/newshour/politics/house-republicans-narrowly-passed-trumps-big-beautiful-bill-heres-what-in-it .