The passage of the One Big Beautiful Bill (OBBB) into law in July 2025 introduced a range of tax reforms impacting several areas, including the structure and accessibility of Health Savings Accounts (HSAs). These accounts have long been recognized for their distinct tax benefits, and the recent legislative changes notably widen the pool of individuals eligible to open and contribute to an HSA. This shift reflects a significant adjustment in the landscape of consumer-driven healthcare savings.
HSAs offer a comprehensive triple tax advantage that is uncommon among financial accounts. First, contributions made to an HSA are deductible from federal taxable income within the contribution year, effectively reducing an individual's taxable earnings. Second, any assets within the account can appreciate through investments without incurring tax liabilities during the growth phase. Third, withdrawals made for qualified medical expenses are exempt from federal income tax. This unique set of benefits has made HSAs a valuable tool for managing healthcare costs and long-term financial planning.
Historically, eligibility to open and contribute to an HSA was limited to individuals enrolled in a high-deductible health plan (HDHP). These plans are distinguished from traditional preferred provider organization (PPO) plans by their higher annual deductibles and correspondingly lower premiums. For 2025, the Internal Revenue Service defines an HDHP as a plan with a minimum deductible of $1,700 for self-only coverage or $3,400 for family coverage. These thresholds set the parameters for the plans that confer HSA eligibility.
With the enactment of the OBBB, the eligibility criteria expanded to include participants in high-deductible Bronze and Catastrophic plans available through the Affordable Care Act (ACA) marketplace starting January 1, 2026. This means that millions more enrolled in these particular ACA plans can now open and contribute to Health Savings Accounts, thereby accessing the tax advantages previously reserved for HDHP enrollees. It is important to note, however, that individuals enrolled in Medicare are excluded from HSA eligibility under these regulations.
Another notable outcome of the OBBB is its impact on individuals utilizing direct primary care arrangements. Direct primary care involves a membership-style model where patients pay a fixed monthly fee in exchange for a defined set of primary care services, including routine health examinations, consultations, and certain laboratory diagnostics and procedures. Before the OBBB, subscribers to such plans were ineligible for HSAs. The new legislation permits individuals with direct primary care memberships to maintain and contribute to HSAs provided the monthly fee does not exceed $150 for individuals or $300 for families. Moreover, HSA funds can now be used to cover the monthly direct primary care fees, enhancing the flexibility and usefulness of these accounts for subscribers.
In terms of contribution limits, the OBBB sets the 2026 maximum HSA contributions at $4,400 for individuals with self-only coverage and $8,750 for those with family coverage. Additionally, individuals aged 55 years and older are eligible to make an extra $1,000 as a catch-up contribution. Given these thresholds, enrollees should consider contributing as much as possible to maximize their tax savings, though even partial contributions offer the unique triple tax advantage HSAs provide.
In summary, these legislative modifications broaden the accessibility and attractiveness of Health Savings Accounts. By expanding who can contribute and allowing subscription-based healthcare arrangements to coexist with HSAs, the OBBB enhances the toolkit available to Americans striving to manage rising healthcare costs effectively through tax-efficient savings.