The Treasury Department and IRS released Notice 2026-05 on December 9, providing detailed guidance on expanded Health Savings Account eligibility under the One, Big, Beautiful Bill. The changes are designed to make HSAs accessible to millions more Americans by loosening restrictions on qualifying health plans and covered services.
The guidance addresses three major expansions that take effect over the next two years. Starting with 2025 plan years, telehealth and remote care services can be covered without meeting high-deductible requirements while maintaining HSA eligibility. Beginning January 1, 2026, bronze and catastrophic health plans will qualify as HSA-compatible, and direct primary care arrangements will become eligible for HSA funding.
“This expansion represents the most significant HSA reform since these accounts were first introduced,” according to industry analysts tracking the legislation. The changes could affect roughly 7.5 million Americans currently enrolled in bronze and catastrophic plans who previously couldn’t contribute to HSAs.
Permanent Telehealth Coverage Without Deductible
The first change makes permanent a COVID-era relief measure that allowed high-deductible health plans to cover telehealth services before patients meet their deductible. Previously, this coverage would have disqualified participants from HSA contributions.
Under the new guidance, employers can design health plans that offer zero-cost virtual visits while maintaining HSA eligibility for their employees. This change affects plan years beginning on or after January 1, 2025.
Bronze and Catastrophic Plans Gain HSA Eligibility
Starting January 1, 2026, bronze and catastrophic health plans available through healthcare exchanges will be treated as HSA-compatible, regardless of whether they meet traditional high-deductible health plan requirements. The IRS clarified that these plans don’t need to be purchased through an exchange to qualify for the new treatment.
Currently, only about 2% of HealthCare.gov enrollees choose HSA-eligible plans, down from 7% in 2020. With roughly 30% of marketplace enrollees selecting bronze plans in 2025, this change could dramatically expand HSA access for individual market participants.
The expansion is particularly relevant for employees whose employers use Individual Coverage Health Reimbursement Arrangements or Qualified Small Employer Health Reimbursement Arrangements. These workers will more frequently have HSA-eligible coverage when using employer dollars to purchase individual bronze or catastrophic plans.
Direct Primary Care Integration
Beginning in 2026, individuals enrolled in certain direct primary care service arrangements can contribute to HSAs and use HSA funds tax-free to pay qualifying DPC fees. The law caps reimbursable DPC fees at $150 per month for individual coverage and $300 per month for family coverage.
This change allows participants to combine HSA-qualified high-deductible plans with direct primary care arrangements, potentially offering robust primary care access alongside catastrophic coverage for specialists and emergencies.
Implementation Timeline and Next Steps
The Treasury and IRS are accepting public comments on Notice 2026-05 through March 6, 2026. Comments can be submitted through the Federal e-Rulemaking portal using identifier “IRS-2025-0335” or mailed to the Internal Revenue Service.
Employers and benefits administrators will need to update plan documents and employee communications before the 2026 plan year to reflect the new eligibility rules. The guidance recommends coordinating with insurance carriers and brokers to ensure proper plan classification under the expanded definitions.
The changes represent a significant shift in HSA policy, potentially affecting millions of Americans’ ability to save for healthcare expenses through tax-advantaged accounts. As regulations are finalized, both employers and individual participants should monitor developments to understand how these expansions might affect their healthcare and savings strategies.