Guidance on Expanded HSA Benefits Under the One, Big, Beautiful Bill

The Internal Revenue Service and the U.S. Department of the Treasury have released new guidance on expanded tax benefits for Health Savings Account (HSA) participants as a result of the One, Big, Beautiful Bill (OBBBA). This guidance, issued through Notice 2026-05, provides important details about how recent health-account changes will work for taxpayers and practitioners alike.

As tax professionals prepare for upcoming filing seasons and client planning conversations, understanding these updates is crucial — especially as they expand who can contribute to HSAs and how those accounts interact with insurance plans and care options.

What Changed? Expanded HSA Eligibility and Flexibility

The OBBBA makes several adjustments that broaden access to HSAs and clarify how specific plans qualify under existing tax rules. Here are the key components of the new guidance:

Telehealth and Remote Care Services Before Deductible

Under prior rules, high-deductible health plans (HDHPs) generally could not cover services before the deductible and still be considered HSA-compatible. The OBBBA guidance makes permanent the allowance for telehealth and remote care services to be received before a deductible is met while still maintaining eligibility to contribute to an HSA. This change applies to plan years beginning on or after January 1, 2025.

Broader Eligibility: Bronze & Catastrophic Plans as HDHPs

One of the most significant updates is that, beginning January 1, 2026, bronze and catastrophic health plans offered through an insurance marketplace will be treated as qualifying HDHPs for HSA purposes — even if they do not meet the traditional HDHP criteria. Previously, many individuals enrolled in these lower-cost plans were ineligible to contribute to an HSA.

Importantly, IRS guidance clarifies that these plans do not need to be purchased through a federal or state exchange to qualify — meaning broader applicability for plan holders and expanded planning options for tax advisors and clients.

Direct Primary Care Arrangements Become HSA-Compatible

Beginning January 1, 2026, certain direct primary care (DPC) service arrangements will be considered compatible with HSAs. Individuals enrolled in eligible DPC arrangements can contribute to an HSA and use HSA funds tax-free to pay periodic DPC fees.

This change reflects growing interest in alternative care models and gives individuals more flexibility in how they manage and pay for preventive or primary care services using tax-advantaged funds.

What It Means for Tax Professionals

These updates offer valuable planning opportunities for tax professionals and their clients:

1. Expanded Client Eligibility

With bronze and catastrophic plans now treated as HDHPs for HSA purposes in 2026, many more clients may become eligible to open and contribute to HSAs. This can broaden tax-advantaged savings strategies, especially for those in lower-cost insurance tiers. Greenville.com

2. Telehealth Permanence = More Predictable Tax Planning

Making telehealth coverage permanent for HSA eligibility removes uncertainty and allows clients to engage in telemedicine without worrying about losing HSA contribution eligibility. This clarity is especially helpful when counseling clients on year-end planning or designing benefit packages.

3. Alternative Care Models Are Now More Tax-Efficient

Direct primary care arrangements are becoming increasingly popular. Under the new guidance, clients in DPC arrangements can now integrate their care structure with HSA contributions — and pay certain fees tax-free — which may make HSAs more attractive for individuals and employers evaluating benefit designs.

Conclusion

The latest IRS guidance on HSAs under the One, Big, Beautiful Bill expands eligibility and provides new flexibility for participants. These changes — including broader plan compatibility, permanent telehealth pre-deductible coverage, and HSA-qualified direct primary care arrangements — open up opportunities for more clients to benefit from tax-advantaged health savings. Tax professionals can leverage this guidance to help clients maximize their HSA contributions and improve overall tax and healthcare planning strategies.

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Disclaimer: This article is for informational and educational purposes only and does not constitute legal tax advice. Advanced Tax Solutions is not liable or responsible for any damages resulting from or related to your use of this information. It is your responsibility to refer to official IRS documentation for information regarding any tax laws or tax information shown here.