On Dec. 9, 2025, the IRS released Notice 2026-05 to explain how the One Big Beautiful Bill Act (OBBBA) expands health savings account (HSA) eligibility and clarifies common questions.
For employers, the biggest takeaway is practical: employees may have more paths to HSA eligibility, and certain benefit designs such as telehealth coverage, individual coverage health reimbursement arrangements (ICHRAs), and direct primary care arrangements need a closer compliance review.
The IRS addressed three HSA-related changes.
- The telehealth safe harbor is now permanent (and applies retroactively for 2025 plan years).
The OBBBA permanently allows an otherwise HSA-eligible individual to retain HSA eligibility even if their high deductible health plan (HDHP) provides telehealth/remote care before the deductible is met, for plan years beginning on or after Jan. 1, 2025.
Notice 2026-05 also confirms that an otherwise eligible person may contribute to an HSA for 2025 even if their plan offered pre-deductible telehealth earlier in 2025 (before the OBBBA was enacted on July 4, 2025), as long as the plan otherwise satisfied HDHP requirements. - Certain bronze and catastrophic individual plans are treated as HDHPs starting in 2026.
Beginning Jan. 1, 2026, bronze and catastrophic plans available as individual coverage through an ACA Exchange are treated as HSA-compatible HDHPs even if they don’t meet the usual HDHP deductible or out-of-pocket limits
Key clarifications in Notice 2026-05 include:
• Off-Exchange coverage purchase can still qualify if the same plan is available on-Exchange.
• The IRS provides a practical “good faith” rule when an individual cannot reasonably determine whether a plan is available on an Exchange.
• SHOP (small group Exchange) coverage generally does not automatically qualify under this special rule because it is not individual coverage (though it could still qualify under the normal HDHP rules if it meets them). - Direct primary care service arrangements can coexist with HSA eligibility starting in 2026 if fee limits are met.
Starting Jan. 1, 2026, an otherwise eligible person enrolled in a qualifying direct primary care service arrangement (DPCSA) may remain HSA-eligible and can use HSA funds tax-free to pay DPC fees. However, the IRS specifically states that an HDHP generally may not pay DPC membership fees pre-deductible as an HDHP benefit.
To preserve HSA contribution eligibility, DPC fees generally must not exceed $150/month (self-only) or $300/month (covers more than one individual) in the aggregate, with inflation adjustments after 2026.
The arrangement must provide solely primary care services by primary care practitioners and be paid via a fixed periodic fee; certain services are excluded from “primary care services” (e.g., procedures requiring general anesthesia, most prescription drugs other than vaccines, and certain lab services).
Important: HSA distributions for DPC fees may still be permitted as qualified medical expenses even when the monthly fee limit is exceeded, but exceeding the limit can disqualify HSA contribution eligibility while enrolled.
Employer Action Items
- Confirm that your HDHP telehealth design aligns with the IRS Notice. If your HDHP covers telehealth pre-deductible, confirm that the services fit within the IRS framework (including the Medicare telehealth list approach described in the Notice).
- Coordinate with your insurance carrier, TPA, and HSA vendor to ensure the plan is still administered as an HDHP (e.g., claims adjudication rules for telehealth vs. in-person services).
- Update messaging in 2026 open enrollment and midyear communications to ensure employees understand that telehealth no longer breaks HSA eligibility. However, in-person services, equipment, or drugs connected to telehealth generally do not automatically become “telehealth” for HDHP purposes.
- Prepare for a potential increase in the number of employees who can contribute to HSAs, even if there are no changes to the group medical plan.
- If employees are allowed to make pre-tax payroll contributions to an HSA, confirm your processes can handle increased participation and eligibility questions.
- Confirm whether your HRA is structured to avoid disqualifying coverage for HSA purposes.
- Ensure your benefits team and vendors have a clear explanation ready to respond to employees who want to use an HRA and contribute to an HSA.
- Decide whether to subsidize or simply facilitate DPCSAs.
- If you pay or reimburse DPC fees, evaluate whether the arrangement inadvertently becomes disqualifying coverage or creates ERISA/plan administration obligations (separate from the tax rules discussed here).
- Communicate the monthly fee limits for HSA contribution eligibility.
- For 2026, the Notice references $150/$300 monthly thresholds for maintaining HSA contribution eligibility while enrolled in a DPCSA.