IRS Guidance Expands Health Savings Accounts Under The One Big Beautiful Bill Act: Enhancements For Telehealth, Remote Care, & Direct Primary Care
- SiekmannCo
- 6 days ago
- 4 min read
The Internal Revenue Service (IRS) released Notice 2026-5 on Dec. 9, 2025, offering critical guidance on the expansions to Health Savings Accounts (HSAs) introduced by the One Big Beautiful Bill Act (OBBBA), signed into law by President Donald Trump on July 4, 2025. This legislation aims to broaden access to tax-advantaged savings for healthcare expenses, addressing rising costs and promoting innovative care models. Key changes include permanent provisions for telehealth and remote care services, integration with direct primary care (DPC) arrangements, and designation of certain Affordable Care Act (ACA) plans as HSA-compatible. These updates build on the foundational benefits of HSAs, which allow eligible individuals to contribute pre-tax dollars, enjoy tax-free growth, and withdraw funds tax-free for qualified medical expenses.
By enhancing Health Savings Accounts, the OBBBAÂ supports greater flexibility in healthcare planning, particularly for those enrolled in high-deductible health plans (HDHPs). Employers and individuals should review these changes to optimize benefits and ensure compliance.
Understanding Health Savings Accounts & Eligibility Under The One Big Beautiful Bill Act
Health Savings Accounts (HSAs)Â are tax-favored vehicles designed to help individuals save for medical expenses while paired with an HDHP. To qualify, individuals must be covered by an HDHP with minimum annual deductibles ($1,600 for self-only and $3,200 for family in 2024, subject to annual adjustments) and no other disqualifying health coverage, such as comprehensive plans or Medicare enrollment. Contributions for 2024 are capped at $4,150 for self-only coverage and $8,300 for family, with an additional $1,000 catch-up for those 55 and older.
The One Big Beautiful Bill Act significantly expands eligibility, making HSAs more accessible amid evolving healthcare needs. Notice 2026-5 clarifies implementation, ensuring retroactive application where applicable to support seamless adoption.
Core Tax Advantages Of Health Savings Accounts
Triple Tax Benefits: Contributions reduce taxable income, earnings grow tax-free, and qualified withdrawals (e.g., for doctor visits, prescriptions, or over-the-counter items like menstrual products) are untaxed.
Portability & Rollover: Funds remain with the account holder across job changes and roll over indefinitely, unlike flexible spending accounts.
Qualified Expenses: Include preventive care, insulin products, and now, under recent expansions, items like condoms and continuous glucose monitors.
These features position HSAs as a powerful tool for long-term financial health planning.
Permanent Extension For Telehealth & Remote Care In Health Savings Accounts
A pivotal change under the One Big Beautiful Bill Act is the permanent allowance for HDHPs to cover telehealth and remote care services before the deductible is met, without disqualifying HSA eligibility. This builds on temporary pandemic-era relief, which expired at the end of 2024 but is now reinstated retroactively for plan years beginning after Dec. 31, 2024.
Notice 2026-5 specifies that individuals enrolled in plans offering pre-deductible telehealth prior to OBBBA's enactment remain HSA-eligible for 2025 contributions. This provision enhances access to virtual consultations, remote monitoring, and other digital health services, which have surged in popularity for their convenience and cost-effectiveness.
Scope Of Telehealth & Remote Care Services
Covered Benefits: Includes virtual visits for general health, mental health, and chronic condition management, but excludes in-person services, medical equipment, or drugs provided alongside.
Employer Implications: Plans can offer zero-cost or low-cost telehealth retroactively to Jan. 1, 2025, boosting employee wellness programs.
Limitations: Services must align with HDHP rules; non-preventive care typically requires deductible satisfaction.
This expansion under the One Big Beautiful Bill Act promotes equitable access to remote care, particularly in underserved areas.
Integration Of Direct Primary Care Arrangements With Health Savings Accounts
Effective Jan. 1, 2026, the One Big Beautiful Bill Act permits individuals in direct primary care (DPC) arrangements to contribute to HSAs if monthly fees do not exceed $150 for individuals or $300 for families (inflation-adjusted annually). DPC models involve fixed periodic fees for unlimited primary care access, bypassing traditional insurance billing. Additionally, these fees qualify as reimbursable medical expenses from HSAs.
Notice 2026-5 defines qualifying DPC arrangements as those solely providing primary care (e.g., check-ups, vaccinations) by practitioners, without separate billing or non-primary services. Fees can be prepaid for up to a year if annualized within limits.
Key Rules For DPC & HSA Compatibility
Employer Restrictions: Fees paid by employers or via pre-tax cafeteria plans cannot be HSA-reimbursed.
HDHP Interaction: DPC fees do not count toward HDHP deductibles or out-of-pocket maximums; HDHPs cannot cover DPC memberships pre-deductible.
Excess Fees: Reimbursements exceeding limits disqualify HSA contributions during enrollment.
This reform addresses long-standing barriers, enabling direct primary care to complement HSAs for proactive, affordable healthcare.
Designation Of Bronze and Catastrophic Plans As HSA-Compatible
To increase HSA accessibility in the individual market, the One Big Beautiful Bill Act deems all bronze and catastrophic ACA Exchange plans as HDHPs effective Jan. 1, 2026, regardless of standard deductible requirements. Bronze plans feature high deductibles and low premiums, while catastrophic plans target younger or low-income individuals with even higher out-of-pocket costs.
Notice 2026-5 confirms that health reimbursement arrangements (HRAs), like individual coverage HRAs (ICHRAs), can reimburse premiums for these plans without impacting HSA eligibility, provided they only cover premiums. This change could benefit millions by pairing affordable coverage with tax-advantaged savings.
Benefits For Marketplace Enrollees
Expanded Options: All on-exchange bronze and catastrophic plans qualify, enhancing affordability for HSA users.
HRA Compatibility: Employers can use ICHRAs or QSEHRAs to support purchases without disqualification.
Tax Implications: Enables more individuals to leverage HSAs for high-deductible scenarios.
Implications For Employers & Individuals
These One Big Beautiful Bill Act enhancements to Health Savings Accounts foster innovation in telehealth, remote care, and direct primary care, potentially reducing overall healthcare spending while improving access. Employers should update plan designs, communicate changes during open enrollment, and consult advisors to avoid compliance pitfalls, such as excess contributions incurring 6% excise taxes.
For personalized support in navigating Health Savings Accounts expansions under the One Big Beautiful Bill Act, integrating telehealth and remote care, or incorporating direct primary care into your benefits strategy, contact The Siekmann Company. Our experts provide comprehensive retirement and employee benefits assistance to ensure your programs are compliant, cost-effective, and employee-focused.
In search of additional insights? Check out these resources:
IRS Unveils Guidance On Trump Accounts: A Tax-Favored Savings Account Under The One Big Beautiful Bill Act