HSAs received a major boost from ‘One Big Beautiful Bill’

For the first time in 22 years, a major step in increasing health savings account expansion took place as part of the “One Big Beautiful Bill” signed into law in July.

An update on new opportunities for HSAs was part of the Employee Benefit Research Institute’s Virtual Policy Forum.

Average HSA balances have increased significantly in nominal terms, nearly doubling between 2013 and 2023, said Jake Spiegel, EBRI research associate. But inflation-adjusted balances have stalled over the past three years.

EBRI research found that the availability of an employer contribution to an HSA raised the average combined contribution to the account and increases the likelihood that an accountholder invests.

The OBBB included three provisions boosting HSAs, said Roy Ramthun of HSA Consulting Services. Those provisions involve telehealth safe harbor, direct primary care, and bronze and catastrophic health plans.

Telehealth safe harbor and HSAs

The OBBB brought back the expired telehealth safe harbor. This was a COVID-19-era policy that permitted high-deductible health plans to provide coverage for telehealth services prior to the deductible being met without impacting HSA eligibility. The telehealth save harbor expired at the end of 2024.

The telehealth safe harbor was made permanent, retroactive for plan years beginning after Dec. 31, 2024. This closes any gap from the period the safe harbor expired. Access to predeductible telehealth and remote care services will not impact HSA eligibility going forward.

Direct primary care arrangements

To be eligible to contribute to an HSA on a tax-advantaged basis, an individual must be covered under an HDHP and cannot be covered any other health plan that is not an HDHP. Under current law, a direct primary care service arrangement usually is considered other coverage that is not an HDHP.

Ramthun said the OBBB changed that in the following ways:

• The OBBB clarifies that direct primary care arrangements are not disqualifying coverage for determining HSA eligibility, within some limits, effective Jan. 1, 2026.
• The direct primary care arrangement fee must not exceed $150 for an individual or $300 for a family and the amounts will be indexed for inflation.
• Direct primary care arrangements may not include procedures the require general anesthesia, prescription drugs other than vaccines and laboratory tests not typically administered in ambulatory primary care.
• The OBBB allows HSA funds to pay for direct primary care fees tax-free, beginning Jan. 1, 2026.

Bronze and catastrophic individual plans

Under the OBBB, all ACA-qualified bronze and catastrophic plans are HSA-compatible HDHPs, effective Jan. 1, 2026. These changes apply to individual coverage ACA plans, whether purchased as a stand-alone plan or reimbursed through an individual coverage health reimbursement arrangement.

More than 7 million people selected an ACA bronze-level plan for plan year 2025, Ramthun said, while another 54,000 selected a catastrophic plan. None of these enrollees was eligible for an HSA this plan year but they all will be HSA-eligible in 2026, assuming they meet the other eligibility requirements.

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