The Department of the Treasury and the IRS have issued Notice 2026-5, which provides Q&A guidance on certain provisions in the One Big Beautiful Bill Act (OBBBA) that expand the availability of health savings accounts (HSAs) for individuals covered by certain types of health plans that would otherwise have been treated as disqualifying health coverage for HSA-eligibility purposes. These include telehealth coverage, direct primary care arrangements, and bronze and catastrophic coverage.
The Treasury and IRS have requested comments on the notice, due on or before March 6, 2026. (Note: Consideration may be given to comments submitted after that date.)
For more information on OBBBA and HSA eligibility, see the July 2025 Insider article, Health and welfare implications for employers in budget reconciliation bill.
Telehealth and other remote care services
The following guidance is effective retroactively for plan years beginning after December 31, 2024:
- Individuals who were otherwise HSA eligible can contribute to their HSA for 2025 if, before the OBBBA was enacted, they were enrolled in a health plan that provided coverage for telehealth or other remote care services before the minimum deductible was satisfied.
- Benefits that the IRS will treat as telehealth and other remote care services include those on the list of telehealth services payable by Medicare that is published annually by the Department of Health and Human Services (HHS). For services not included on the HHS list, taxpayers should apply the principles of section 1834(m) of the Social Security Act (SSA), its implementing regulations and other guidance issued by HHS defining “telehealth services.”
- Telehealth or other remote care services do not extend to in-person services, medical equipment or drugs furnished in connection with those services.
Direct primary care service arrangements
The following guidance is effective for months beginning after December 31, 2025:
- Under a direct primary care service arrangement (DPCSA), the sole compensation for care must be the fixed periodic fee. Therefore, an arrangement that provides healthcare items and services to individuals on the condition that they are members in the arrangement and have paid a fixed periodic fee, but also that bills separately for those items and services (through insurance or otherwise), would not be a DPCSA.
- A DPCSA includes an arrangement in which participating providers offer certain healthcare items and services outside of the DPCSA to individuals regardless of membership and separately bill both members and non-members for those items and services.
- A DPCSA includes an arrangement that has fees that are billed for periods of more than a month but no more than a year. For 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.
- Whether an arrangement qualifies as a DPCSA depends on the terms of the arrangement, not the services used by an individual.
- An HSA-qualified high-deductible health plan (HDHP) may not offer primary care benefits other than those permitted under section 223 of the IRC (e.g., telehealth services or preventive care), by paying fees for, or providing membership in, a DPCSA without a deductible or before the minimum deductible has been satisfied.
- If an individual is enrolled in both a DPCSA and an HSA-qualified HDHP, the HDHP may not count fees paid by the individual for the individual’s membership in the DPCSA toward the annual deductible and out-of-pocket maximum for the HDHP.
- Section 223 of the IRC does not define “primary care services” by reference to the services identified by the Health Care Procedure Coding System codes under the SSA. However, the following are excluded from the definition of “primary care services”: (1) procedures that require the use of general anesthesia, (2) prescription drugs other than vaccines, and (3) laboratory services not typically administered in an ambulatory primary care setting.
- DPCSA fees may not be treated as amounts paid for qualified medical expenses that may be reimbursed by an HSA if they were paid by an individual’s employer, including by salary reduction through an IRC section 125 cafeteria plan.
- An HSA is permitted to treat an expense for a DPCSA as incurred on (1) the first day of each month of coverage on a pro rata basis, (2) the first day of the period of coverage, or (3) the date the fees are paid. For example, an HSA can immediately reimburse a substantiated fee for a DPCSA that begins on January 1 of that enrollment year, even if the fee was paid before the first day of the enrollment year.
- Fees for a DPCSA that exceed the monthly dollar limit ($150 for an individual or $300 if it covers more than one individual) will be treated as medical expenses reimbursable from an HSA but will disqualify the covered individual from eligibility for making HSA contributions while the individual is enrolled.
Bronze and catastrophic plans treated as HSA-qualified HDHPs
The following guidance is effective for months beginning after December 31, 2025:
- A bronze or catastrophic plan will be treated as an HDHP if the plan is available as individual coverage through an Exchange established under section 1311 or 1321 of the Affordable Care Act even if the plan does not satisfy the minimum annual deductible requirement or maximum out-of-pocket expenses requirement for an HDHP.
- A bronze or catastrophic plan that is available as individual coverage will not fail to be an HDHP because an employer-sponsored individual coverage HRA is used to purchase the coverage.
- A bronze plan or catastrophic plan purchased off-Exchange on the individual market will be treated as an HDHP if the same plan is available as individual coverage through an Exchange.
- A bronze plan available as individual coverage on an Exchange that provides benefits that are greater than the actuarial equivalent to 60% of the full actuarial value of the benefits provided under the plan may still be treated as an HSA-qualifying HDHP.
Going forward
- Employer plan sponsors of HSA-qualifying HDHPs should make sure that affected plans, such as those offering telehealth benefits prior to satisfying the minimum deductible, are operating in accordance with the guidance in Notice 2026-5 and communicate any changes to plan participants in a timely manner.
- Employer plan sponsors should determine whether to provide comments on Notice 2026-5 by the March 6, 2026 due date.
