The Department of the Treasury and Internal Revenue Service issued Notice 2026-05 on December 9, 2025, providing long-awaited guidance on the Health Savings Account (HSA) provisions enacted through the One Big Beautiful Bill Act (OBBBA).
Signed into law on July 4, 2025, the OBBBA amended Section 223 of the Internal Revenue Code to remove barriers that prevented millions of Americans from participating in HSAs. Notice 2026-05 addresses three critical areas: telehealth services, bronze and catastrophic plan compatibility, and direct primary care arrangements.
Table of contents
Telehealth and Remote Care Now Permanent
The pandemic-era flexibility allowing telehealth services before meeting the HDHP deductible is now permanently codified. Effective for plan years beginning on or after January 1, 2025, individuals can receive telehealth and remote care services without first satisfying their deductible, while maintaining full HSA contribution eligibility.
This change acknowledges that modern healthcare delivery has evolved. Employers with HDHPs can now confidently offer robust telehealth benefits without jeopardizing their employees’ HSA eligibility. However, benefits professionals should note that this safe harbor only applies to remote services, excluding in-person care, medical equipment, and pharmaceuticals provided in connection with telehealth visits.
Bronze and Catastrophic Plans – HSA Expansion and Eligibility
Perhaps the most consequential HSA provision of the OBBBA is that bronze and catastrophic plans, whether purchased through an Exchange or on the individual market, are automatically treated as HDHPs for HSA eligibility purposes effective January 1, 2026.
This eliminates a long-standing structural problem that caused most bronze and catastrophic plans to fail the precise statutory requirements of Section 223(c)(2). Enrollees were often locked out of HSA participation despite bearing substantial out-of-pocket costs.
For employers offering Individual Coverage HRAs (ICHRAs), this guidance is particularly valuable. Employees who use ICHRA funds to purchase qualifying bronze or catastrophic plans can now contribute to HSAs, provided the ICHRA complies with existing guidance under IRS Notice 2008-59. Industry analysts project that this expansion could add 3 to 4 million new HSA participants.
HSA Compatibility for Direct Primary Care
Beginning January 1, 2026, individuals enrolled in qualifying Direct Primary Care Service Arrangements (DPCSAs) can contribute to HSAs and use HSA funds tax-free to pay periodic DPC fees. The DPCSA healthcare model has gained significant traction among employers and consumers seeking predictable, relationship-based primary care.
For this purpose, the IRS defines eligible DPCSAs as those providing primary care services for a fixed periodic fee not exceeding $150 per adult per month on an annualized basis.
DPCSA fees may be reimbursed from HSAs on a pro rata monthly basis, at the start of the coverage period, or on the date fees are paid. However, if a DPC arrangement includes services beyond primary care as statutorily defined, individuals cannot simply decline to use those additional services and still qualify the arrangement as a DPCSA.
Strategic Implications and Next Steps
For benefits administrators, group insurance professionals, and employers, Notice 2026-05 creates immediate action items.
- Review client communications and enrollment materials, as the bronze and catastrophic plan provisions open HSA participation to populations who may have never considered this benefit before.
- Assess ICHRA strategies, as the interplay between ICHRAs, bronze plans, and HSAs now offers more flexibility, but requires careful plan design to ensure compliance.
- Evaluate DPC integration opportunities, as employers exploring direct primary care models now have a clearer path to incorporate these arrangements alongside HSA-eligible plans.
The IRS is soliciting comments on Notice 2026-05 through March 6, 2026. If your organization identifies implementation challenges, this is your opportunity to shape final guidance. Comments can be submitted through the Federal e-Rulemaking portal (indicate “IRS-2025-0335”).
Looking Forward
IRS Notice 2026-05 confirms that HSAs are becoming more central to the American healthcare landscape. With total HSA assets reaching $159 billion across 40 million accounts as of mid-year 2025, this expansion positions the tax-advantaged savings vehicle for accelerated growth.
For professionals in the benefits, insurance, and financial services spaces, the clients and employers you serve have more options and more flexibility than ever to incorporate HSAs into their benefits strategy.
Founded in 1984, DataPath, Inc. is a leading provider of full-service HSA administration solutions for benefits professionals and financial institutions. Contact us today to learn how we can help you grow your HSA capabilities.
