# Part III - Administrative, Procedural, and Miscellaneous

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URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A30f998724a13ec5d

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- **Collection:** Agency decision
- **Document type:** Agency decision

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Part III - Administrative, Procedural, and Miscellaneous

Expanded Availability of Health Savings Accounts under the One, Big, Beautiful
Bill Act (OBBBA)

Notice 2026-5
I.

PURPOSE
This notice provides guidance on changes relating to health savings accounts

(HSAs) enacted by Pub. L. 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the
One, Big, Beautiful Bill Act (OBBBA). These changes generally expand the availability of
HSAs under section 223 of the Internal Revenue Code (the Code). This notice provides
answers to common questions related to these changes.
II.

BACKGROUND
A. Section 223 in general
Section 223 of the Code permits eligible individuals to establish an HSA. HSAs

are accounts that can receive tax-favored contributions by or on behalf of eligible
individuals. Amounts in an HSA may be used on a tax-free basis to pay or reimburse
medical expenses. Among the requirements to qualify as an eligible individual under
section 223(c)(1) is that the individual be covered under a high deductible health plan
(HDHP) and have no disqualifying health coverage. As defined in section 223(c)(2), an
HDHP is a health plan that satisfies certain requirements, including requirements with
respect to minimum deductibles and maximum out-of-pocket expenses. Only eligible

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individuals under section 223(c)(1) are allowed to make contributions to an HSA or to
receive contributions from an employer to their HSA.
Generally, under section 223(c)(2)(A), an HDHP is not permitted to provide
benefits for any year until the minimum annual deductible for that year is satisfied and is
not permitted to require a payment of an annual deductible plus other annual out-ofpocket expenses (other than premiums) above the out-of-pocket maximum for the year.
However, section 223(c)(2)(C) provides a safe harbor for the absence of a deductible for
preventive care. Under section 223(c)(2)(C), “[a] plan shall not fail to be treated as a
high deductible health plan by reason of failing to have a deductible for preventive care
(within the meaning of section 1861 of the Social Security Act (SSA), except as
otherwise provided by the Secretary).”
The statutory minimum annual deductible and out-of-pocket maximum 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
B. OBBBA changes to section 223
1. Telehealth and Other Remote Care Services.
Section 71306 of the OBBBA makes permanent a safe harbor for the absence of
a deductible for telehealth and other remote care services that was initially enacted on a

For calendar year 2026, the annual deduction limit for contributions to HSAs under section 223(b)(2)(A)
for an individual with self-only coverage is $4,400 and $8,750 for family coverage. For calendar year
2026, an HDHP is defined under section 223(c)(2)(A) as a health plan with an annual deductible that is
not less than $1,700 for self-only coverage and $3,400 for family coverage, and for which the annual outof-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). Rev. Proc. 2025-19, 2025-18 IRB 1430.
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temporary basis as part of the Coronavirus Aid, Relief, and Economic Security Act, Pub.
L. 116-136, 134 Stat. 281 (Mar. 27, 2020) (CARES Act). The CARES Act provision was
effective March 27, 2020, and applied for plan years beginning on or before December
31, 2021. Subsequent legislation extended the application through taxable years
beginning before January 1, 2025. The OBBBA permanent extension applies
retroactively for plan years beginning after December 31, 2024.
2. Bronze and Catastrophic Plans Treated as HDHPs
Section 71307 of the OBBBA amended section 223(c)(2) of the Code to provide
that the term “high deductible health plan” includes any plan described in
subsection (d)(1)(A) or (e) of section 1302 of the Patient Protection and Affordable Care
Act (ACA) that is available as individual coverage through an Exchange.
Section 1302(d)(1)(A) of the ACA describes a bronze level plan, which is required to
provide a level of coverage that is designed to provide benefits that are actuarially
equivalent to 60 percent of the full actuarial value of the benefits provided under the
plan. Section 1302(e) of the ACA describes a catastrophic plan, which is a health plan
solely offered in the individual market that does not provide bronze or higher levels of
coverage and that generally provides essential health benefits only after an individual
has incurred the maximum cost sharing under section 1302(c)(1) of the ACA (other than
required preventive health care and coverage for at least three primary care visits). In
addition, to be a catastrophic plan, enrollment must be restricted to individuals who
have not attained the age of 30 before the beginning of the plan year or individuals who
are exempt from the requirements of section 5000A because they do not have access to

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affordable coverage or are otherwise experiencing a hardship with respect to the
capability to obtain coverage under a qualified health plan (QHP).
Before the OBBBA was enacted, many bronze plans did not qualify as HDHPs
because the plans’ out-of-pocket maximum exceeded the statutory limits for HDHPs or
because they provided benefits that were not preventive care without a deductible.
Similarly, catastrophic plans could not be HDHPs because they were required to provide
three primary care visits before the minimum deductible was satisfied and to have an
out-of-pocket maximum that exceeded the statutory limits for HDHPs.
This provision amending the definition of an HDHP applies for months beginning
after December 31, 2025.
3. Direct Primary Care Service Arrangements
An individual who is covered under an HDHP is eligible to contribute to an HSA,
provided that the individual is not covered under any disqualifying coverage while the
individual is covered under the HDHP. An HSA may be used to pay for medical care
under section 213(d) of the Code; however, an HSA generally may not be used to pay
for insurance, with certain exceptions.
The Treasury Department and the Internal Revenue Service (IRS) understand
that direct primary care service arrangements (DPCSAs) typically charge a fixed
periodic fee and provide for an array of primary care services and items, such as
physical examinations, vaccinations, urgent care, laboratory testing, and the diagnosis
and treatment of some sicknesses and injuries. For the purposes of eligibility to
contribute to an HSA, this type of DPCSA generally would constitute a health plan that
provides coverage before the minimum annual deductible is satisfied and that is not

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disregarded coverage or preventive care. Therefore, prior to the effective date of
section 223(c)(1)(E) (as added by OBBBA), an individual generally was not eligible to
contribute to an HSA if the individual was enrolled in a DPCSA.
Section 71308(a) of the OBBBA amended section 223(c)(1) of the Code to
provide that a DPCSA as defined in section 223(c)(1)(E)(ii) is not “treated as a health
plan for purposes of [section 223(c)(1)](A)(ii)”, which generally limits eligible individuals
to individuals who are enrolled in an HDHP and are not covered under any other health
plan. Thus, enrollment in such a DPCSA will not cause an individual to fail to be an
eligible individual for that reason. For purposes of this rule, the term "direct primary care
service arrangement" means, with respect to any individual, an arrangement under
which such individual is provided medical care (as defined in section 213(d)) consisting
solely of primary care services provided by primary care practitioners (as defined in
section 1833(x)(2)(A) of the SSA, determined without regard to clause (ii) thereof), if the
sole compensation for such care is a fixed periodic fee. “Primary care practitioner” is
defined in section 1833(x)(2)(A) of the SSA to mean an individual who is 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. For purposes of section 223(c)(1)(E) of the Code, the term
“primary care services” does not include (1) procedures that require the use of general
anesthesia, (2) prescription drugs other than vaccines (therefore, vaccines are
permitted primary care services), and (3) laboratory services not typically administered
in an ambulatory primary care setting.

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The term "direct primary care service arrangement" does not include any
arrangement if, with respect to an individual for a month, the aggregate fees for all
DPCSAs for the individual for a month exceed $150 (or $300 for any such arrangement
that covers more than one individual). The aggregate limit is adjusted annually for
inflation for taxable years after 2026.
Section 71308 of the OBBBA also amended section 223(d)(2)(C) of the Code to
provide that any expense for coverage under “any direct primary care service
arrangement” is not subject to the general restriction that prohibits an HSA from being
used to pay for insurance.
The provision relating to DPCSAs applies to months beginning after December
31, 2025.
III.

QUESTIONS AND ANSWERS
A.

Telehealth and Remote Care Services

Q-1. May an otherwise eligible individual contribute to an HSA for 2025 if, before
the OBBBA was enacted on July 4, 2025, the individual was enrolled in a health plan
that provided coverage for telehealth or other remote care services before the minimum
deductible was satisfied, but the health plan otherwise satisfied the requirements to be
treated as an HDHP?
A-1. Yes, an otherwise eligible individual may contribute to an HSA for 2025 if,
before the OBBBA was enacted on July 4, 2025, the individual was enrolled in a health
plan that provided coverage for telehealth or other remote care services before the
minimum deductible was satisfied, if the health plan otherwise satisfied the

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requirements to be treated as an HDHP. This is true regardless of whether the
contribution is made before or after July 4, 2025.
Q-2. Which benefits will the IRS treat as telehealth and other remote care
services that may be offered by an HDHP without a deductible?
A-2. A plan will not fail to be an HDHP solely because it offers telehealth benefits
without a deductible for a service that is included on the list of telehealth services
payable by Medicare that is published annually by the Department of Health and Human
Services (HHS) under section 1834(m)(4)(F) of the SSA. 2 For services that are not
included on the HHS list, taxpayers should apply the principles of section 1834(m) of the
SSA, its implementing regulations at 42 CFR 410.78, and other guidance issued by
HHS defining “telehealth services” and related terms.
Q-3. If in-person services, medical equipment, or drugs are furnished in
connection with a telehealth or other remote care service, may they be provided by an
HDHP without a deductible under section 223(c)(2)(E) of the Code?
A-3. No, telehealth or other remote care services do not extend to in-person
services, medical equipment, or drugs furnished in connection with those services
unless they would otherwise be treated as telehealth services under guidance provided
in Q&A-2.
B.

Bronze and Catastrophic Plans Treated as HDHPs

2 See https://www.cms.gov/medicare/coverage/telehealth/list-services; see 90 Fed. Reg. 49266, 49317

(Nov. 5, 2025), https://www.federalregister.gov/documents/2025/11/05/2025-19787/medicare-andmedicaid-programs-cy-2026-payment-policies-under-the-physician-fee-schedule-and-other#p-573.

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Q-4. Will a bronze or catastrophic plan that does not satisfy the minimum annual
deductible requirement or maximum out-of-pocket expenses requirement under
section 223(c)(2)(A)(i) and (ii) be treated as an HDHP?
A-4. Yes, 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 ACA even if the plan does
not satisfy the minimum annual deductible requirement or maximum out-of-pocket
expenses requirement for an HDHP under section 223(c)(2)(A)(i) and (ii) of the Code.
Q-5. Will a bronze or catastrophic plan that is available as individual coverage fail
to be treated as an HDHP because an employer-sponsored health reimbursement
arrangement (HRA) such as an individual coverage HRA (ICHRA) or a qualified small
employer HRA is used to purchase the coverage?
A-5. No, a bronze or catastrophic plan that is available as individual coverage will
not fail to be an HDHP because an employer-sponsored ICHRA is used to purchase the
coverage. 3 However, generally, an HRA (including an ICHRA) is permitted to reimburse
only premiums for the HRA to be a health plan that would not disqualify an employee
from being an eligible individual. See Notice 2008-59, 2008-29 IRB 123, Q&A-1.
Q-6. Will a bronze plan or catastrophic plan purchased off-Exchange on the
individual market be treated as an HDHP if the same plan is available as individual
coverage through an Exchange?

3 See 29 CFR 2510.3-1(l) (establishing safe harbor conditions for when an employer payment of

premiums for individual health insurance will not cause the individual health insurance coverage to
become group health insurance coverage or coverage offered in connection with a group health plan
under the Employee Retirement Income Security Act of 1974, Public Law 93-406, 88 Stat. 829, as
amended).

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A-6. Yes. 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. This includes plans sold exclusively off-Exchange
without a cost-sharing reduction load that are otherwise identical to plans sold onExchange with a cost sharing reduction load. 4
Q-7. If the individual enrolls in a bronze or catastrophic plan that is available as
individual coverage on the individual market but not on an Exchange, and the individual
has no reason to believe the coverage is not available on an Exchange, may the
individual contribute to an HSA?
A-7. Yes. In the interest of sound tax administration, because the ability of an
individual to determine whether a particular plan is available on an Exchange is limited,
the IRS will treat an individual as an eligible individual if the individual enrolls in a
bronze or catastrophic plan that is available as individual coverage on the individual
market but not on an Exchange, and the individual has no reason to believe that the
bronze or catastrophic plan is not available on an Exchange.
Q-8. Will bronze plans offered as Small Business Health Options Program
(SHOP) coverage be treated as HDHPs?
A-8. Generally, no. SHOP coverage that may be offered by a small employer is
not individual coverage and therefore does not meet the criteria to be treated as an
HDHP under section 223(c)(2)(H). However, such a plan can still be an HDHP if it
otherwise satisfies the applicable requirements, including the minimum annual

4 See https://www.cms.gov/files/document/offering-exchange-only-plans-without-csr-loading.pdf.

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deductible requirement and maximum out-of-pocket expenses requirement under
sections 223(c)(2)(A)(i) and (ii). Note, however, that an employer-sponsored ICHRA
may be used to purchase a bronze plan or catastrophic plan that is available as
individual coverage. See Q&A-5.
Q-9. If a bronze plan available as individual coverage on an Exchange provides
benefits that are greater than the actuarial equivalent to 60 percent of the full actuarial
value of the benefits provided under the plan, may it be treated as an HDHP?
A-9. Yes. Bronze plans described under section 1302(d)(1)(A) of the ACA (that
is, a plan providing a level of coverage that is designed to provide benefits that are
actuarially equivalent of 60 percent of the full actuarial value of the benefits that are
provided under the plan) are treated as HDHPs under section 223(c)(2)(H) of the Code.
However, compliance with other provisions of the ACA may affect the real actuarial
value of a bronze plan. The Treasury Department and the IRS have consulted with HHS
and are aware that some bronze plan variants may have an actuarial value that
exceeds 60 percent because of factors such as the de minimis variance provided for
under section 1302(d)(3) of the ACA or cost-sharing reductions offered to American
Indians and Alaska Natives under section 1402(d) of the ACA. These plans are still
considered bronze plans under section 1302(d)(1)(A) of the ACA by HHS and are
treated as HDHPs under section 223(c)(2)(H) of the Code.
Q-10. An individual generally is not an eligible individual who may contribute to
an HSA if the individual has received medical services at an Indian Health Services
(IHS) facility at any time during the previous three months. See Notice 2012-14, 2012-8
IRB 41. Does Notice 2012-14 apply to individuals who receive medical services at an

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IHS facility and enroll in a bronze plan variant with cost-sharing reductions offered to
American Indians and Alaska Natives under section 1402(d) of the ACA, which may
have special coverage requirements related to IHS facilities?
A-10. No. Notice 2012-14 does not apply to individuals who receive medical
services at an IHS facility and enroll in a bronze plan variant with cost-sharing
reductions offered to American Indians and Alaska Natives under section 1402(d) of the
ACA. Thus, such individuals may be eligible individuals even if they have received
medical services at an IHS facility during the previous three months.
C.

Direct Primary Care Service Arrangements

DPCSA not treated as a health plan
Q-11. Does a DPCSA under section 223(c)(1)(E) of the Code include an
arrangement that provides certain healthcare items and services to individuals on the
condition that they are members in the arrangement and have paid a fixed periodic fee,
but bills separately for those items and services (through insurance or otherwise)?
A-11. No, the sole compensation for care provided under a DPCSA must be the
fixed periodic fee. Thus, a DPCSA under section 223(c)(1)(E) does not include an
arrangement that provides certain healthcare items and services to individuals on the
condition that they are members in the arrangement and have paid a fixed periodic fee,
but bills separately for those items and services (through insurance or otherwise).
Q-12. Does a DPCSA under section 223(c)(1)(E) of the Code include an
arrangement in which providers participating in the arrangement, which otherwise
qualifies as a DPCSA, offer certain healthcare items and services outside of the
arrangement to individuals regardless of membership in the arrangement and

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separately bill both members and non-members for those items and services (through
insurance or otherwise)?
A-12. Yes.
Q-13. May a DPCSA under section 223(c)(1)(E) include an arrangement that has
fees that are billed for periods of more than a month but no more than a year?
A-13. Yes, a DPCSA under section 223(c)(1)(E) may include an arrangement that
has fees that are billed for periods of more than a month, but no more than a year
provided the aggregate fees are fixed, periodic, and do not exceed the monthly limit (on
an annualized basis). 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.
Q-14. If an arrangement provides services other than the primary care services
described in section 223(c)(1)(E), may an individual who is a member in the
arrangement decline to use such services and treat the arrangement as a DPCSA under
section 223(c)(1)(E)?
A-14. No. Whether an arrangement qualifies as a DPCSA under
section 223(c)(1)(E) depends on the terms of the arrangement, not the services used by
an individual.
Q-15. May an HDHP offer primary care benefits other than those allowed under
section 223(c)(2)(C)-(G) (for example, telehealth and preventive care) by paying fees
for, or providing membership in, a DPCSA without a deductible or before the minimum
deductible has been satisfied?
A-15. No. Certain DPCSAs are not treated as a health plan for purposes of
section 223(c)(1)(A)(ii), which generally defines eligible individuals who may contribute

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to an HSA as individuals who are enrolled in an HDHP and are not covered under any
other health plan. However, section 223 does not provide that an HDHP may offer a
benefit that consists of paying fees for, or providing membership in, a DPCSA without a
deductible or before the deductible has been satisfied. 5
Q-16. If an individual is enrolled in both a DPCSA and an HDHP, may the HDHP
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?
A-16. No. In this situation, the fees for membership in a DPCSA paid by the
individual would not be amounts paid out-of-pocket for items and services that are
covered by the HDHP and therefore would not count toward the minimum annual
deductible and out-of-pocket maximum for the HDHP.
Q-17. Section 223(c)(1)(E) defines “primary care practitioners” by reference to
section 1833(x)(2)(A) of the SSA. Does section 223(c)(1)(E) of the Code define “primary
care services” by reference to the services identified by the Health Care Procedure
Coding System (HCPCS) codes under section 1833(x)(2)(B) of the SSA?
A-17. No. Although section 223(c)(1)(E)(ii)(I) of the Code defines “primary care
practitioners” by reference to section 1833(x)(2)(A) of the SSA, it does not define
“primary care services” by reference to the definition at section 1833(x)(2)(B) of the
SSA. In addition, section 223(c)(1)(E)(iii) of the Code specifically excludes from “primary
care services” (1) procedures that require the use of general anesthesia, (2) prescription

5 Bronze plans are treated as HDHPs under section 223 regardless of which services they cover before

the deductible. It is the Treasury Department’s and IRS’s understanding that ACA section 1301(a)(3)
allows QHPs to provide coverage through a direct primary care medical home plan. Nothing in this notice
is intended to provide any interpretive guidance with respect to ACA section 1301(a)(3).

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drugs other than vaccines, and (3) laboratory services not typically administered in an
ambulatory primary care setting.
HSA distributions for the reimbursement of fees for a DPCSA
Q-18. Are DPCSA fees treated as amounts paid for qualified medical expenses
under section 223(d)(2) that may be reimbursed by an HSA if they were paid by an
individual’s employer, including by salary reduction through a section 125 cafeteria
plan?
A-18. No. These payments by the employer are not expenses of the HSA
beneficiary. The payments are compensation excluded from employees’ gross income
under section 106.
Q-19. May DPCSA fees be reimbursed from an HSA before the coverage period
for the arrangement?
A-19. Generally, yes. 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. Thus, for 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.
Q-20. What requirements must an arrangement meet in order to qualify as a
DPCSA whose fees are treated as amounts paid for qualified medical expenses under
section 223(d)(2) that may be reimbursed by an HSA?
A-20. For purposes of section 223(d)(2), a DPCSA is an arrangement under
which an individual is provided medical care (as defined in section 213(d)) consisting

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solely of primary care services provided by primary care practitioners (as defined in
section 1833(x)(2)(A) of the SSA, determined without regard to clause (ii) thereof), if the
sole compensation for such care is a fixed periodic fee, and such care does not include
(1) procedures that require the use of general anesthesia, (2) prescription drugs other
than vaccines, or (3) laboratory services not typically administered in an ambulatory
primary care setting. For purposes of section 223(d)(2), there is no specific limit on the
amount of the fixed periodic fee as there is for purposes of determining whether a
DPCSA is a health plan under section 223(c)(1)(E). Thus, fees for a DPCSA that do not
satisfy the monthly dollar limit in section 223(c)(1)(E)(ii)(II) will be treated as medical
expenses reimbursable from an HSA in accordance with section 223(d)(2)(C)(v) but will
disqualify the covered individual from eligibility for making HSA contributions while the
individual is enrolled.
IV.

REQUEST FOR COMMENTS
The Treasury Department and the IRS request comments on all aspects of this

notice. Written comments should be submitted on or before March 6, 2026.
Consideration will be given, however, to any written comment submitted after that date,
if such consideration will not delay the issuance of guidance. The subject line for the
comments should include a reference to Notice 2026-5. Comments may be submitted
electronically via the Federal eRulemaking Portal at https://www.regulations.gov (type
IRS-2025-0335 in the search field on the regulations.gov homepage to find this notice
and submit comments). Alternatively, comments may be submitted by mail to: Internal
Revenue Service, CC:PA:01:PR (Notice 2026-5), Room 5503, P.O. Box 7604, Ben
Franklin Station, Washington, DC 20044. All commenters are strongly encouraged to

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submit comments electronically. The Treasury Department and the IRS will publish for
public availability any comment submitted electronically, or on paper, to the IRS’s public
docket on https://www.regulations.gov.
V.

EFFECT ON OTHER DOCUMENTS
Notice 2012-14 is modified with respect to the guidance regarding eligibility to

contribute to an HSA within three months of receiving medical care from the Indian
Health Services.
VI.

DRAFTING INFORMATION
The principal author of this notice is Alexander Krupnick of the Office of Associate

Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes),
though other Treasury Department and IRS officials participated in its development. For
further information on the provisions of this notice, contact Mr. Krupnick at (202) 3175500 (not a toll-free number).

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A30f998724a13ec5d. Public record. Not legal advice.