A major update to Health Savings Accounts (HSAs), a popular way of setting aside pre-tax funds for medical expenses like deductibles, copays, and coinsurance, has been announced by the IRS. The agency explained how new regulations will take effect in 2025 and 2026 in a Tuesday release related to a legislative bill passed in July.
“The Department of the Treasury and the Internal Revenue Service today issued Notice 2026-05 PDF providing guidance on new tax benefits for Health Savings Account participants under the One, Big, Beautiful Bill,” the announcement stated clearly. “These changes expand HSA eligibility, which allows more people to save and to pay for healthcare costs through tax-free HSAs.“ For many, this means having easier access to a tax-advantaged method of managing medical expenses now and accumulating savings for the future.
Telehealth is becoming permanent for HSA users
You can use online doctor visits before you meet your deductible and still qualify for an HSA (plan years begin on or after January 1, 2025). If you have a high-deductible health plan (HDHP), routine virtual checkups or follow-ups won’t stop you from adding money to your HSA.
Convenient care doesn’t have to be postponed in order to keep your tax status. Because HSAs provide tax benefits like pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified expenses.
Bronze, catastrophic, and direct primary care: Big 2026 expansions
On January 1, 2026, two significant changes take effect. First, even if they don’t fit the standard HDHP definition, Bronze and Catastrophic marketplace plans will be considered qualifying HDHPs for HSA purposes. For cheaper premiums, many people choose Bronze or Catastrophic coverage, but up until now, they were typically unable to open HSAs in addition to those plans. However, under the new regulation, they can.
Second, an HDHP/HSA could be mixed with specific direct primary care (DPC) service arrangements. Before this modification, the IRS usually regarded DPC participation as “other coverage,” which prevented individuals from making contributions to an HSA. Beginning in 2026, eligible individuals may make contributions while enrolled in a DPC plan. Periodic DPC fees up to $150 per month, adjusted annually for inflation, can be paid with tax-free HSA funds.
HSA vs. FSA: Know the differences for 2025
Flexible Spending Accounts (FSAs) and HSAs have different rules.
Enrollment in an HDHP is necessary for an HSA, but the funds are carried over from year to year and stay with you even if you change plans or jobs. The HSA contribution cap for 2025 is $8,550 for families and $4,300 for individuals.
FSAs, on the other hand, have to be provided by an employer-sponsored health plan. They typically adhere to a use-it-or-lose-it policy, which states that money must be spent by the end of the plan year or it will be forfeited to the employer. One of two relief options—a grace period of up to two and a half months or a carryover of up to $660 in 2025—can be selected by employers, but not both.
The 2025 FSA contribution cap is $3,300. If your employer offers an FSA and you need consistent spending for immediate expenses, that might be a good fit. An HSA combined with an HDHP usually makes sense if you want savings that accumulate over time and stay yours.
Simple steps for smart planning
You can use telehealth services before reaching the deductible and still make HSA contributions if your plan year begins on or after January 1, 2025.
People in Bronze or Catastrophic plans will become eligible for HSA on January 1, 2026, without having to change their coverage.
Qualifying DPC arrangements can be paired with an HDHP/HSA, and HSA dollars can be used to pay up to $150 in monthly DPC fees, indexed for inflation.
These updates make it easier to pay for care now and save for the future if they’re combined with the benefits of HSAs already in place.