Healthcare costs in America are continuously rising, which is why the importance of tax-free health savings options is rapidly increasing.
Among these options, Health Savings Accounts have long been an effective financial tool, allowing people to save for medical expenses on a tax-free basis.
The recently passed OBBBA has made this system even more comprehensive. Recently, the IRS and the US Department of Treasury issued a notice clarifying which tax benefits related to HSAs will apply under the new law.
The sole objective of this is to bring as many people as possible under the eligibility criteria for HSAs. Read this article to learn about the changes for HSA under the OBBBA.
What is a Health Savings Account (HSA)?
A Health Savings Account (HSA) is a tax-advantaged savings account that can be used for qualified medical expenses. The money deposited into it is completely tax-free, the interest earned on it is also tax-free, and withdrawals for medical expenses are also tax-free.
The biggest advantage of this type of account is that the deposited amount does not expire at the end of the year but is transferred to the next year. For example, if you invested $5,000 in a year and only spent $2,000, the remainder will be available for use in the following year; it doesn’t become unusable.
The amount invested in this account can be spent even after retirement, and there are no restrictions on its use. Although previously this account was only available to those with a High-Deductible Health Plan (HDHP), things have changed according to the new laws.
Permanent reliance on telehealth services
Under the One Big Beautiful Bill Act, permanent relief has been provided for telehealth and remote care services. Now, individuals can access telehealth services without meeting their High Deductible Health Plan (HDHP) deductible and still contribute to their Health Savings Account (HSA).
Previously, these facilities were temporary and had to be renewed every year. Their permanent status has now boosted digital health services. This change will benefit rural areas, the elderly, and busy professionals the most, as they can now receive online doctor consultations without any tax implications.
Bronze and Catastrophic plans are now HSA-eligible.
Due to the implementation of OBBA, starting January 1, 2026, Bronze and Catastrophic health plans will also be considered HSA-compatible, regardless of whether they meet the definition of a traditional HDHP.
According to current rules, those enrolled in these plans are not eligible to invest in HSAs. However, the IRS has clarified that plans purchased outside the exchange will still be considered eligible. This will benefit young professionals and those choosing lower-premium plans the most.
Direct Primary Care (DPC) and HSA
The Big Beautiful Bill AC has now brought direct primary care (DPC) under the umbrella of health savings accounts (HSAs). After January 1, 2026, every individual enrolled in a qualifying DPC plan will be able to contribute to an HSA.
It is also expected that HSA funds can now be used tax-free to pay for monthly or annual DPC membership fees. This change is considered a major step towards making healthcare more transparent and affordable.
HSA contribution limits and HDHP rules for 2026
The Internal Revenue Service has increased the contribution limits under HSAs for 2026 compared to 2025. The contribution limit for self-only coverage is $4,400, and for family coverage, the amount is $8,750.
In 2026, according to the definition of an HDHP, the minimum deductible is $1,700 for self-only coverage and $3,400 for family coverage, and the maximum out-of-pocket expense is $8,500 for self-only coverage and $17,000 for family coverage.
Disclaimer: Information about IRS HSA changes under OBBBA is for general awareness only. Official rules and eligibility are determined by the IRS.
