What's Happening?
The Treasury and the Internal Revenue Service (IRS) have released Notice 2026-05, which provides new guidance on tax benefits for Health Savings Account (HSA) participants following the enactment of the One Big Beautiful Bill Act. This legislation, signed
by President Trump, aims to expand access to HSAs. Key changes include the permanent allowance for telehealth and remote care services before meeting the high-deductible health plan (HDHP) deductible, effective from January 1, 2025. Additionally, bronze and catastrophic plans will be treated as HDHPs starting January 1, 2026, allowing individuals enrolled in these plans to contribute to HSAs. The guidance also clarifies that these plans do not need to be purchased through an exchange to qualify. Furthermore, individuals in direct primary care service arrangements can contribute to HSAs and use funds tax-free for periodic fees starting next year.
Why It's Important?
This guidance is significant as it broadens the scope of HSAs, making them more accessible to a wider range of individuals. By including telehealth services and expanding the types of plans that qualify as HDHPs, the IRS is facilitating greater flexibility in healthcare management and financial planning. This could lead to increased HSA participation, providing individuals with more control over their healthcare expenses and potential tax benefits. The changes may also encourage more people to opt for high-deductible plans, knowing they can still access necessary services without immediate out-of-pocket costs. This could have a substantial impact on the healthcare industry, potentially influencing insurance plan offerings and consumer choices.
What's Next?
The IRS is seeking public feedback on the new guidance, with comments due by March 6, 2026. Stakeholders, including healthcare providers, insurance companies, and consumers, are encouraged to submit their opinions and suggestions. This feedback process may lead to further refinements in the guidance, ensuring it meets the needs of all parties involved. The ongoing dialogue between the IRS and the public will be crucial in shaping the future landscape of HSAs and their role in the U.S. healthcare system.
