The July Wrap Up

At Cocoon, we are deeply concerned by the detrimental impact of the “One Big Beautiful Act” (OBBBA) on American families. Our mission to empower every working person to care for what matters most is directly challenged by policies that undermine access to essential support systems. We believe People leaders have a vital role in understanding these implications and advocating for the protection of their employees.

The detrimental realities of the OBBBA for working families

The OBBBA introduces sweeping changes that are set to deepen the challenges faced by the working population. Its most significant provisions, particularly those affecting social safety nets, are poised to inflict serious harm on vulnerable populations. Here’s what that looks like in practice.

The OBBBA includes drastic cuts to Medicaid and implements stricter eligibility requirements, including mandatory work requirements for many able-bodied adults. This is not merely an abstract policy change; it is a direct attack on the health security of millions. Experts estimate that anywhere from 10.5 to 16 million people could lose their Medicaid or Children's Health Insurance Program (CHIP) coverage by 2034. For working families, this means the very real risk of losing access to essential medical care, preventive services, and critical support during life's most vulnerable moments, like pregnancy and childbirth. 

Medicaid currently covers nearly half of all births in the U.S. Losing health coverage translates to immense financial burdens, forcing families to choose between medical bills and basic necessities. This heightened stress inevitably impacts workforce productivity, increases absenteeism due to untreated conditions, and can lead to higher turnover as individuals struggle to make ends meet. Furthermore, the cuts jeopardize already fragile rural hospitals, leading to closures and limiting access to care for individuals in those communities.

Undermining financial security 

While the OBBBA may introduce some minor tax adjustments, these are drastically outweighed by provisions that actively dismantle crucial support systems for financial stability. The bill enacts significant reductions to the Supplemental Nutrition Assistance Program (SNAP), potentially leading to millions of families losing vital food assistance. 

Food insecurity directly impacts focus, health, and the ability of individuals to thrive at work. For many low-income working families, the changes to the Child Tax Credit will mean less financial support, deepening the economic precarity they already face. Additionally, new student loan limits and the elimination of flexible repayment plans will make higher education less accessible and more financially burdensome.

Increasing compliance burdens and workplace stress 

Beyond the direct financial and health impacts, new immigration enforcement measures funded by the OBBBA could lead to increased workplace audits and administrative burdens. This not only creates compliance risks for employers but can also foster an environment of fear and instability for individuals with diverse backgrounds within the workplace.

Why People leaders need to take a stand

The OBBBA represents a profound challenge to the well-being of the American workforce. The role of a People leader extends beyond compliance; it demands a deep understanding of how external policies impact the people they serve. Here are some ways People leaders can step up to protect their employees amidst these changes:

• Advocate for employee well-being: Be acutely aware of how these cuts will impact the health and financial security of your workforce. This might mean reevaluating existing benefits, providing resources, or looking for ways to mitigate the fallout.
• Champion comprehensive support: Recognize that programs like Medicaid and SNAP are lifelines for many working families. When these are threatened, the stability of the workforce is at risk.
• Inform and educate: Ensure your leadership and employees understand the real-world consequences of this legislation.

We are committed to fighting for a future where every working person has the support they need to care for what matters most. We urge all HR and People Operations professionals to critically assess the implications of the OBBBA and consider how you can best protect and support the working population against these detrimental changes.

Until next time,

Team Cocoon