IRS Releases One Big Beautiful Bill Act (OBBBA) Guidance on HSAs

General HSA Background

By way of background, to be eligible for HSA contributions, an individual must:

• Be covered under a high-deductible health plan (HDHP),
• Not be covered by other health coverage that is not an HDHP (with certain exceptions),
• Not be enrolled in Medicare, and
• Not be claimed as a dependent on someone else’s tax return.^[1]

OBBBA & HSA Background

The OBBBA provides permanent safe harbor relief allowing HSA-compatible HDHPs to cover telehealth and other remote care services on a pre-deductible basis without jeopardizing an individual’s ability to make (and receive) HSA contributions.

In 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which created a safe harbor relief provision permitting HSA-compatible HDHPs to cover telehealth and remote care services on a first-dollar basis, or prior to members satisfying their HDHP deductible. This COVID-related HSA/telehealth safe harbor was extended two more times by Congress until it expired on December 31, 2024. The effective date for the HSA/telehealth safe harbor under the OBBBA is retroactive to December 31, 2024, the date the prior COVID relief expired.

OBBBA also reclassifies all bronze and catastrophic health insurance plans offered through the Affordable Care Act Marketplace/Exchange as qualifying HDHPs, allowing eligible enrollees to contribute to HSAs, effective January 1, 2026.

Additionally, the OBBBA expands HSA eligibility by permitting individuals with direct primary care service arrangements (DPCSAs) to make (and receive) HSA contributions as long as their monthly fees are $150 or less ($300 or less for family coverage)^[2], effective January 1, 2026. The OBBBA also treats DPCSA membership fees as qualified medical care expenses that can be paid for/reimbursed using HSA funds. A DPCSA is generally one in which an individual receives medical care consisting solely of primary care services provided by a primary care practitioner^[3] for a fixed annual or periodic fee without billing a third party (such as an insurance carrier).^[4]

Click here and here for prior Risk Strategies articles with more extensive details on the OBBBA and its impact on employee benefits.

Notice Highlights

The Notice provides clarifying guidance regarding the HSA enhancements expanded in the OBBBA, as highlighted below:

Telehealth and Remote Care Services

• HSA Contributions Timing: Eligible individuals may contribute to HSAs for 2025 even if they were enrolled in health plans that provided pre-deductible coverage for telehealth or other remote care services before the July 4, 2025 enactment date of the OBBBA (but otherwise satisfied HDHP requirements), whether contributions are made before or after the OBBBA's enactment.
• Medicare Telehealth Billing Codes: To determine which telehealth and remote care benefits may be offered without disqualifying an individual from HSA eligibility, employer plan sponsors (and their plan service providers) must reference the list of approved telehealth billing (CPT) codes paid for by Medicare. Items not included on the list may still be qualifying pre-deductible expenditures if they follow the principles outlined in applicable U.S. Department of Health and Human Services (HHS) guidance.
• In-person services/Equipment/Drugs: Any in-person services, medical equipment, or drugs provided in connection with telehealth services are not considered telehealth or remote care services. As a result, these particular services cannot be provided by an HDHP pre-deductible under this OBBBA telehealth relief exception, unless they would otherwise be treated as telehealth services under the Notice.

Individual Bronze and Catastrophic Exchange Plans

• IRS HDHP Limits: Effective January 1, 2026, bronze or catastrophic plans will be treated as HDHPs if they are available as individual coverage through an Exchange, even if they exceed the HDHP minimum annual deductible or out-of-pocket maximum requirements.
• ICHRAs: Bronze and catastrophic plans purchased using an employer-sponsored Individual Coverage Health Reimbursement Arrangement (ICHRA) will still qualify as HSA-compatible HDHPs if the ICHRA is only permitted to reimburse premiums.^[5]
• Off-Exchange Plans and Indian Health Services: Individuals enrolled in bronze plans purchased outside of the Marketplace/Exchange may still contribute to an HSA. Moreover, individuals who receive medical services at an Indian Health Services (IHS) facility and enroll in a bronze plan may be HSA-eligible individuals even if they have received medical services at an IHS facility during the previous three months.^[6]
• Small Business Health Options Program: Bronze plans offered under the Small Business Health Options Program (SHOP) are not treated as HDHP coverage under this particular OBBBA provision since it only applies to individual coverage, rather than group coverage (such as the SHOP).

Direct Primary Care Service Arrangements (DPCSA)

• Compensation: Since DPCSAs’ sole compensation for primary care services under the arrangement must be a fixed periodic fee, DPCSAs may not provide items and services to individuals who are members in the arrangement and have paid a fixed periodic fee while billing separately for those items and services (through insurance or otherwise). However, DPCSAs may offer certain items and services outside of the arrangement and separately bill members and non-members alike for those items and services (through insurance or otherwise)^[7].
• Billing Timing: DPCSAs may include a billing arrangement with periods of more than a month, but no more than a year, as long as the aggregate fees are fixed, periodic, and do not exceed the monthly limit of $150 or less for individual coverage, or $300 or less for family coverage (on an annualized basis).

  Example: For 2026, the fee for a single individual could be $1,800 for a year, $900 for six months, or $450 for three months.

• Services Provided: A DPCSA cannot provide services other than primary care services, even if a member does not utilize those other services. Notably, the Notice states that whether an arrangement qualifies as a DPCSA depends on the arrangement terms, rather than the services used, essentially meaning that “per-service billing” is not permitted under a DPCSA. Furthermore, just because an individual is enrolled in a DPCSA does not mean an individual’s accompanying HDHP is exempt from the applicable rules. An individual enrolled in a DPCSA and an HSA-compatible HDHP would still be required to meet the deductible prior to receiving coverage for all services other than those provided through the DPCSA or those permitted under HSA rules (e.g., telehealth and preventive care).
• HDHP Deductibles and OOP Maximums: HDHPs may not count an individual's DPCSA membership fees toward the HDHP's annual deductibles and out-of-pocket (OOP) maximums since DPCSA membership fees are not amounts paid out-of-pocket for items and services covered by an HDHP.
• Primary Care Services: DPCSAs cannot provide the following services as “primary care services” as defined under the OBBBA:
  • Procedures requiring the use of general anesthesia,
  • Prescription drugs other than vaccines, and
  • Laboratory services not typically administered in an ambulatory primary care setting
• DPCSA Fees Reimbursement from HSAs:
  • DPCSA fees cannot be reimbursed by an HSA if these fees are paid by an individual’s employer, including through pre-tax salary reductions under an Internal Revenue Code Section 125 cafeteria plan,
  • DPCSA fees may be reimbursed from an HSA before the coverage period for the arrangement,

    Example: An HSA may immediately reimburse a substantiated fee for a DPCSA that begins on January 1 of that enrollment year, even if the enrolled individuals paid the fee prior to the first day of the enrollment year.

  • DPCSA fees that exceed the applicable dollar limit ($150 individual/$300 family coverage per month in 2026) may be reimbursed from an HSA but will disqualify the covered individual from making HSA contributions while enrolled in the DPCSA.

Employer Group Health Plan Sponsor Considerations

Employer group health plan sponsors of HSA-compatible HDHPs are advised to review the Notice guidance thoroughly to assess whether any updates are required to plan documents, particularly if they also sponsor ICHRAs and/or DPCSAs for their employees.

Since these HSA expansions under the OBBBA generally allow more employees to participate in HSAs (and enjoy their tax advantages), employers should also consider updating related employee communications accordingly.

Risk Strategies is here to help. Contact your Risk Strategies account team with any questions, or contact us directly here.

[1] https://www.irs.gov/pub/irs-pdf/p969.pdf

[2] Adjusted annually for inflation.

[3] As defined in Section 1833(x)(2)(A) of the SSA, determined without regard to clause (ii) thereof, generally meaning a physician who has a primary specialty designation of family medicine, internal medicine, geriatric medicine, or pediatric medicine, or who is a nurse practitioner, clinical nurse specialist, or physician assistant.

[4] The IRS currently views DPCSAs as a separate and additional form of health insurance coverage. This means that prior to January 1, 2026, individuals cannot simultaneously contribute to an HSA (as a participant of an HDHP) and be enrolled in a DPCSA.

[5] See Notice 2008-59, Q&A-1.

[6] Modifies prior IRS guidance in Notice 2012-14.

[7] Presumably, the billing rate for these items and services would need to be fair-market value.