IRS Issues Guidance Expanding HSA Access

The IRS released a notice on December 9 providing guidance on new tax benefits for health savings account participants authorized by the One Big Beautiful Bill Act.

The update comes as millions of Americans face uncertainty about expiring Affordable Care Act marketplace tax credits and projections of 9% higher health costs in 2026. Tax credits approved during the COVID-19 pandemic are set to end on January 1, 2026, without changes from Congress. The Urban Institute estimated earlier this year that without the tax credits, enrollment in ACA policies would decline by more than 7 million people.

Tuesday’s guidance affirmed 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, effective for plan years beginning on or after January 1, 2025.

The notice also clarified that, as of January 1, 2026, bronze and catastrophic plans available through a health care exchange are considered HSA-compatible, regardless of whether the plans satisfy the general definition of a high-deductible health plan. The plans do not have to be purchased through an exchange to qualify for the relief.

The IRS also confirmed that, starting January 1, 2026, individuals enrolled in high-deductible health plans who participate in certain direct primary care benefits can pay direct primary care fees from their HSAs if their monthly fees are $150 or less ($300 or less for family coverage). They may also use their HSA funds tax-free to pay periodic direct primary care fees.

“These changes expand HSA eligibility, which allows more people to save and to pay for healthcare costs through tax-free HSAs,” the IRS notice stated.

The Department of Treasury and the IRS invited comment on the notice until March 6, 2026, according to the IRS press release.

Rob Austin, head of thought leadership at Alight, says HSAs are the “only savings vehicle in the U.S. tax code offering triple tax advantages”:

• Contributions are pre-tax when made through payroll deductions;
• Growth in the account through interest or investment earnings is tax-free; and
• Withdrawals are tax-free when used for qualified medical expenses.

At year-end 2024, there were 39.3 million HSAs in the U.S. with nearly $147 billion in assets collectively providing coverage for roughly 59.3 million people, according to data from HSA investment solutions provider Devenir Group LLC.

Devenir also projected that the HSA market will exceed 47 million accounts and more than $208 billion in total assets by the end of 2027.