💌 Today’s Thing: A Brief Primer on Updated Health Savings Account (HSA) Program — and what the changes could mean for You
Earlier this week, the Department of the Treasury and the Internal Revenue Service issued Notice 2026-05 as implementing guidance for taxpayers to establish and contribute cash toward a health savings account (HSA) for people covered under a high-deductible health plan (HDHP) and have no disqualifying health coverage. The Trump Administration describes this update as an expansion of tax savings for individual health care coverage.
Within this notice, there is a 10-page Q&A section explaining how the One, Big, Beautiful Bill Act (OBBBA) updates provisions for:
- Telehealth and Remote Care Services
- Affordable Care Act (ACA) Bronze and Catastrophic Plans Treated as HDHPs
- Direct Primary Care Service Arrangements
Here a very brief snapshot of some details…as usual, with clarity.
🧾 The deets…clean and quick – WHAT are the critical changes for account holders?
The OBBBA makes permanent a COVID-era safe harbor provision for receiving telehealth and other remote care services before meeting the HDHP deductible. It makes the safe harbor retroactive for health plan years that started after December 31, 2024.
The statutory minimum annual deductibles and out-of-pocket maximums are adjusted annually for inflation. The minimum annual deductible for 2025 is $1,650 for self-only coverage and $3,300 for family coverage, and the out-of-pocket maximum for 2025 is $8,300 for self-only coverage and $16,600 for family coverage.1
In 2026, the deductible amounts will increase to $1,700 and $3,400 for self-only and family coverage respectively. The out-of-pocket maximums will increase to for family coverage, and for which the annual out-of-pocket expenses (excluding premiums) do not exceed $8,500 for self-only coverage and $17,000 for family coverage (other than bronze and catastrophic plans).2
The allowable tax deduction amounts for contributions to an HSA are based on monthly limitations. You can’t deduct all of it based on a one-time lump sum contribution. For self-only coverage on the HDHP, the maximum monthly amount is 1/12 of $2,250. The family coverage amount is 1/12 of $4,500. For individuals that reach age 55 during the tax year, an additional $1,000 can be deducted.3
🧾 WHAT can an HSA pay for?
An HSA may be used to pay for medical care under IRC §213(d) of the Code; however, an HSA generally may not be used to pay for insurance, with certain exceptions. Notice 2026-05 addresses the issue of fixed periodic fees that direct primary care service arrangements (DPCSAs) charge for primary care services and items, such as:
- physical examinations,
- vaccinations,
- urgent care,
- laboratory testing, and
- diagnosis and treatment of some sicknesses and injuries.4
However, the primary care services definition does not include:
- procedures that require the use of general anesthesia,
- prescription drugs other than vaccines (therefore, vaccines are permitted primary care services), and
- laboratory services not typically administered in an ambulatory primary care setting.5
📣 If you want to be heard…SPEAK UP!
There’s plenty of time for interested parties to chime in on this. Treasury and IRS invite comments until March 6, 2026 at 11:59 PM Eastern Standard Time. Commentors are encouraged to use the Federal e-Rulemaking portal to submit comments online. Use “IRS-2025-0335” in the search field.
There’s the scoop, everyone! Thanks for taking time to check out this week’s edition of the Tax Clarity Newsletter.
If you want to join our mailing list, subscribe and receive a direct copy, or provide any feedback, send an e-mail to admin@sweetclarity.com.
Thank you so much!
References (5)
1 Notice 2026-5, Expanded Availability of Health Savings Accounts under the One, Big, Beautiful Bill Act (OBBBA) (October 23, 2025), last accessed December 12, 2025.
2 Ibid.
3 IRC §223(b)
4 Notice 2026-05
5 Ibid.
DISCLAIMER: The information in this newsletter is derived from public information, provided for education purposes. It is not provided as a financial advisory service and should be relied upon as such. For advice on a specific tax matter, please consult a tax professional.
