IRS, Treasury Issues New Guidance on HSA Changes

Employers and employees have new guidance regarding some of the upcoming changes affecting health savings accounts (HSAs) that are part of President Donald Trump’s sweeping tax bill from the summer.

The IRS and the Treasury Department released a notice last week regarding the modifications being made to HSAs as part of the One Big, Beautiful Bill that was signed into law July 4. “These changes expand HSA eligibility, which allows more people to save and to pay for health care costs through tax-free HSAs,” the IRS said in a news release.

Among the guidance spelled out in the 16-page notice is confirmation of a permanent safe harbor provision allowing HSA holders to receive telehealth and other remote care services before meeting their deductible, while remaining eligible to contribute to an HSA. That change is retroactive, effective for plan years beginning on or after Jan. 1, 2025.

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Beginning Jan. 1, 2026, an otherwise eligible individual enrolled in certain direct primary care (DPC) service arrangements may contribute to an HSA. In addition, they may use their HSA funds tax-free to pay periodic DPC fees. Starting in the new year, individuals enrolled in high-deductible health plans (HDHPs) who participate in certain direct primary care benefits can pay DPC fees from their HSAs if their monthly fees are $150 or less, or $300 or less for family coverage.

The administration also gave guidance on bronze and catastrophic plans treated as an HDHP. As of Jan. 1, 2026, bronze and catastrophic plans available through an exchange are considered HSA-compatible, regardless of whether the plans satisfy the general definition of an HDHP, the Treasury and the IRS said. This expands the ability of people enrolled in these plans to contribute to HSAs, which they generally have not been able to do in the past. Notice 2026-05 clarifies that bronze and catastrophic plans do not have to be purchased through an exchange to qualify for the new relief.

Comments on the notice are allowed until March 6. 

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Industry experts have said that the changes will expand the HSA footprint and impact employers and their health care benefits, since changes will broaden HSA eligibility and likely result in more employers embracing the savings accounts.

“Considering there has been little legislative expansion since HSAs were first introduced, expanded access to potentially millions of Americans is a positive development,” Joseph Giordano, compliance manager for Dallas-based online retailer Health-E Commerce, the parent brand of FSA Store and HSA Store, said in the summer after the tax law was passed.

Many industry experts tout HSAs as a smart way for employees to save for medical expenses, even in retirement, citing their triple tax benefits: Contributions are made pretax, the money in the accounts grows tax-free, and withdrawals for qualified medical expenses are also tax-free. More than 60% of employers offer an HSA, according to the 2025 SHRM Employee Benefits Survey.

Other industry experts were hoping for other reforms to HSAs to come to fruition because several other big HSA changes — increased contribution limits and allowing certain sports and fitness expenses to be HSA-eligible — were initially part of the House-passed budget reconciliation bill, but those didn’t make it into law. After initially eliminating all of the HSA provisions in the House version of the bill, the Senate added back two HSA-related provisions and introduced another that did not appear in the House bill.