The Treasury Department and the Internal Revenue Service (IRS) have issued new guidance on expanding Health Savings Account (HSA) eligibility, delivering a tax-free means for millions more Americans to save and pay for health care costs.
Why It Matters
The update, prompted by the One, Big, Beautiful Bill (OBBB), marks a major shift for consumers who rely on high-deductible health plans (HDHPs), direct primary care arrangements, and, for the first time, those enrolled in Bronze and Catastrophic plans offered on or outside Insurance Exchanges.
These changes could fundamentally reshape the tax advantages and flexibility available to Americans seeking to manage out-of-pocket health care expenses.
What To Know
On Tuesday, the IRS and Treasury issued Notice 2026-05, outlining several important updates for HSA eligibility and usage:
- Telehealth and Remote Care: Americans can continue to access telehealth and remote care services before meeting their HDHP deductible while retaining eligibility to contribute to HSAs. This provision is now permanent under the OBBB for plan years starting after January 1, 2025.
- Bronze and Catastrophic Plans: Beginning January 1, 2026, both health plans—whether purchased on or off the federal exchange—will qualify as HDHPs for HSA purposes. This represents a significant expansion for those who have previously been excluded from HSA participation under these plan types.
- Direct Primary Care (DPC): As of January 1, 2026, individuals enrolled in approved direct primary care service arrangements may contribute to HSAs and use those funds tax-free to pay DPC fees.
According to the IRS, these changes mean significantly more Americans will have access to the triple tax benefits of HSAs: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
What People Are Saying
An IRS press release said: “These changes expand HSA eligibility, which allows more people to save and to pay for health care costs through tax-free HSAs.”
An information page from HealthCare.gov says: “As a result of the Working Families Tax Cuts legislation signed into law by President [Donald] Trump, more 2026 Marketplace plans—including all Bronze and Catastrophic health plans—now work with Health Savings Accounts to help you pay your share of costs for health care.”
What Happens Next
The IRS is soliciting public comments on all aspects of Notice 2026-05, with a deadline set for March 6, 2026.
Stakeholders, including consumers, health care providers, and insurers, are encouraged to submit feedback through the Federal e-Rulemaking portal or by mail.
Notice 2026-05 represents an early stage of implementation; as the rules evolve, further clarifications and potential adjustments are likely.
Additionally, the upcoming expiration of enhanced Affordable Care Act premium tax credits at the end of 2025 creates further urgency around ways Americans can make health care more affordable.
Some members of Congress, including Republican Senator Josh Hawley of Missouri, are advocating for broader deductions for health expenses as debates continue over the permanence and targeting of federal health care subsidies.