Health Savings Accounts (HSAs) have long been one of the most powerful tools in a consumer’s financial toolkit. Contributions are tax-deductible, funds grow tax-free, and qualified withdrawals for medical expenses aren’t taxed either — creating a triple-tax benefit that makes HSAs valuable not just for healthcare costs, but for long-term savings planning.
Recent guidance from the Department of the Treasury and the Internal Revenue Service confirms that changes included in the One Big Beautiful Bill Act (OBBBA) will expand access to and flexibility within HSAs — retroactivating in 2025 and continuing into 2026.
What’s Changing — and When
The IRS issued Notice 2026-05, which provides clarity on several key changes to HSA eligibility and use:
- Telehealth and Remote Care Before Deductibles
Under prior rules, most high-deductible health plans (HDHPs) had to satisfy a deductible before any benefits were paid if the participant wanted to keep HSA eligibility. The pandemic led to temporary telehealth exceptions, but those were set to expire.
The OBBBA makes this telehealth exception permanent. Starting with plan years beginning January 1, 2025, individuals enrolled in an HDHP can receive telehealth and other remote care services before meeting the plan deductible and still remain eligible to contribute to an HSA.
This change recognizes the growing role of virtual care and helps ensure that people don’t lose eligibility for HSA contributions simply because their plan covers telemedicine upfront.
- Bronze and Catastrophic Plans Become HSA-Compatible
One of the biggest barriers to HSA participation has been the requirement that individuals must be covered by a “qualified” HDHP. Many Affordable Care Act (ACA) marketplace plans — especially bronze and catastrophic plans — didn’t meet those strict definitions.
Starting January 1, 2026, the OBBBA reclassifies all bronze and catastrophic ACA marketplace plans as HDHPs for HSA purposes, regardless of whether they meet the traditional HDHP deductible or out-of-pocket rules.
That means millions more people can now establish and contribute to HSAs without changing their health insurance — a significant expansion of eligibility that could open pre-tax savings doors for individuals and families who previously weren’t HSA-eligible.
Importantly, this rule applies whether the plan is purchased through an exchange or off-exchange, as long as the plan is available as part of an individual market offering.
- Direct Primary Care Fees Now Eligible
Direct Primary Care (DPC) arrangements — membership-style primary care services with a periodic fee — were previously problematic for HSA eligibility. Under old rules, participating in a DPC arrangement could disqualify someone from contributing to an HSA, even if they otherwise had an HDHP.
Under the OBBBA, individuals enrolled in certain DPC arrangements can still contribute to an HSA as long as the arrangement meets IRS criteria. Moreover, members can use HSA funds tax-free to pay periodic DPC fees.
This change expands how HSAs can be paired with evolving healthcare delivery models and gives consumers more flexibility in both paying for and choosing care.
Why These Changes Matter
Taken together, these updates represent the most significant expansion of HSA eligibility in years. Millions of Americans — especially those enrolled in lower-tier bronze or catastrophic plans — now have pathways to start or grow tax-advantaged savings for medical cost.
For financial planners, employers, and benefits advisors, the new guidance also highlights the importance of benefits design and communication. Plans that integrate HDHP coverage, telehealth, and HSA eligibility now have broader appeal and can better support workers’ financial wellness.
Planning Considerations
While many provisions take effect in 2026, the telehealth rule is already effective for 2025 plan year.
Taxpayers should also be mindful that eligibility for HSA contributions still depends on traditional criteria — including being covered by a qualifying HDHP and not being enrolled in Medicare — but the expanded definitions under the OBBBA widen the pool of qualifying plans.
As with any tax-advantaged account, documentation and plan details matter. Contributions, distributions, and eligibility must be reported properly on tax returns to ensure the full benefit is realized without triggering unintended tax consequences.
Why Professional Guidance Pays
HSAs sit at the intersection of healthcare planning and tax strategy — and while the OBBBA expands access, it also creates new questions about eligibility, qualified expenses, and plan design. For individuals and employers alike, working with a tax and benefits professional can ensure these opportunities aren’t overlooked.
Whether you’re using an HSA to pay for current medical costs, save for future needs, or bolster overall financial security, understanding the nuances of these expanded rules can help you make the most of tax-advantaged savings — legally, efficiently, and strategically.
For tax advice customized for your specific situation, contact Saunders Tax & Accounting at http://www.saunderstax.com or call us at 301-714-2071. Open Monday – Thursday 9 am to 5 pm with extended hours during tax season. Visit www.saunderstax.com/contact.php for detailed hours.
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