A USA Today article recently reported that more Americans than ever before will have access to Health Savings Accounts (HSAs) starting next year. Thanks to new provisions in President Donald Trump’s “One Big Beautiful Bill Act,” experts say tens of millions more people will be able to benefit from this triple tax-advantaged savings vehicle. The new law makes more Affordable Care Act insurance plans, Direct Primary Care arrangements, and plans with telehealth coverage compatible with an HSA.
HSAs are a favorite among financial advisers because of their significant tax benefits:
- Contributions are tax-free.
- Money grows tax-free.
- Withdrawals for qualifying medical expenses are tax-free.
According to Richard Pon, a certified public accountant, these combined benefits “can add up to significant savings over the course of a family’s life if they are healthy and let the funds accumulate.” He suggests thinking of an HSA as a “piggy bank for medical expenses that can grow similar to an Individual Retirement Account.”
The health and benefits platform Lively considers this the “most significant HSA expansion in nearly two decades.” They recommend that individuals, employers, and brokers begin planning during the 2025 open enrollment period to take full advantage of the new rules.
Which ACA plans will qualify for HSAs?
Starting in 2026, Bronze and catastrophic plans will become HSA-eligible. Currently, these lower-premium, higher-deductible plans are excluded because they don’t meet HSA requirements.
Many Bronze plans fall short of the high-deductible health plan (HDHP) definition since they cover non-preventive services—like prescription drugs and office visits—before the deductible is met. Catastrophic plans miss the mark for similar reasons and often have maximum out-of-pocket limits above what’s allowed for HSAs.
In the 2025 open enrollment period, roughly 30% of ACA enrollees chose Bronze plans, per the Centers for Medicare and Medicaid Services. Fewer than 100,000 opted for catastrophic plans, which are limited to those under 30 or individuals with certain hardship exemptions.
Additional HSA-Eligible Plans Expanded
Several new healthcare arrangements now qualify for Health Savings Account eligibility, broadening options for consumers seeking tax-advantaged medical savings.
Direct Primary Care Integration Starting next year, Americans enrolled in Direct Primary Care (DPC) arrangements can contribute to HSAs, provided their DPC costs remain within specified limits – up to $150 monthly for individuals and $300 for families.
DPC represents an alternative healthcare model where patients pay their primary care physician a flat monthly or annual fee for comprehensive primary care services, bypassing traditional insurance for basic care. This arrangement eliminates per-visit fees and provides patients with direct access to their healthcare provider.
Under the new rules, DPC membership fees will also qualify as eligible medical expenses that can be paid using HSA funds, creating additional flexibility for participants managing their healthcare costs.
Telehealth Coverage Expansion High Deductible Health Plans (HDHPs) can now offer telehealth services without requiring patients to meet their deductible or pay copayments, while still maintaining HSA eligibility. This change applies retroactively to plans beginning January 1st.
The timing aligns with growing telehealth adoption – data from the National Center for Health Statistics shows that 30% of American adults utilized telemedicine services in 2022, highlighting the increasing importance of virtual care access.
These modifications reflect evolving healthcare delivery models and aim to reduce barriers to both preventive care and tax-advantaged healthcare savings, particularly as consumers increasingly seek alternatives to traditional insurance arrangements for routine medical needs.
The Strategic Value of HSA Access
Health Savings Accounts offer compelling financial advantages that extend far beyond basic healthcare coverage, making expanded access particularly significant for long-term financial planning.
Triple Tax Advantage HSAs provide a unique tax structure unmatched by other savings vehicles:
Contributions reduce your current tax burden through either pretax payroll deductions or tax-deductible contributions, effectively lowering your federal taxable income. This reduction can create cascading benefits by potentially moving you into a lower tax bracket, which may qualify you for additional deductions, credits, or government benefit programs that have income thresholds.
All growth within the account – whether from interest or investment returns – accumulates completely tax-free, allowing your healthcare savings to compound without annual tax drag.
Withdrawals for qualified medical expenses are entirely tax-free, creating a true tax shelter for healthcare costs throughout your lifetime.
Long-Term Financial Flexibility Unlike Flexible Spending Accounts with their restrictive “use it or lose it” policies, HSA funds roll over indefinitely without expiration. This permanence transforms the HSA from a short-term expense account into a powerful long-term savings vehicle.
The investment capability of HSAs allows account holders to potentially grow their healthcare savings substantially over time. These funds can address future medical expenses, including the significant healthcare costs typically encountered during retirement.
Retirement Planning Tool After age 65, HSAs function similarly to traditional retirement accounts – funds can be withdrawn for any purpose without penalties, though non-medical withdrawals face income tax. This flexibility makes HSAs effective dual-purpose accounts for both healthcare and general retirement planning.
Employer Incentives Many employers recognize the mutual benefit of high-deductible health plans paired with HSAs. Since these plans typically carry lower premiums, employers often share the savings by making tax-free contributions to employee HSA accounts, providing immediate value while encouraging participation in cost-effective healthcare arrangements.
