Here’s what changed:

Bronze and Catastrophic plans are automatically HSA-qualified.

Any Bronze or Catastrophic plan offered on a state insurance exchange under the Affordable Care Act will automatically be considered HSA-qualified coverage. These plans generally have lower monthly premiums, but higher deductibles before insurance coverage starts, and/or higher potential out-of-pocket costs. An HSA will allow individuals on these plans to save tax-free for these higher out-of-pocket expenses. The provision only applies to individual healthcare coverage and doesn’t extend to Small Business Health Options Program (SHOP) or small and medium-sized business (SMB) exchange purchases. This provision is effective Jan. 1, 2026.

HSA-eligible individuals may now participate in Direct Primary Care (DPC) arrangements, and their HSA funds can be used tax-free to pay periodic DPC fees.

Previously, participation in DPC arrangements was deemed “other coverage” by the IRS, which disqualified HSA contribution ability. This change allows for participation in these practices so long as their monthly fees are less than $150 for single individuals or $300 for families. Additionally, these monthly fees can be paid as qualified medical expenses from an HSA. Fees paid by employers for DPC arrangements must be reported on employees’ W-2 forms. This provision is effective Jan. 1, 2026.

Individuals can use telehealth services without affecting their HSA contribution eligibility.

Previously, the IRS viewed enrollment in telehealth services as potentially disqualifying coverage if the services were provided before the minimum HSA deductible was met. Twice before Congress passed a 2-year waiver of this rule, which allowed for HSA-eligible people to use telehealth services without disrupting their ability to contribute to an HSA. This change provides a permanent allowance for the use of telehealth/telemedicine services without affecting HSA contribution eligibility. This provision is retroactively effective to Jan. 1, 2025.

Dependent Care Flexible Spending Account (DC-FSA) limits increased.

Previously, the DC-FSA limit of $5,000 per household (or $2,500 for married individuals filing separately) had been in place since 1986 and was not indexed for inflation. The new limits for 2026 and beyond will be $7,500 (or $3,750 for married individuals filing separately). The limit is not indexed for inflation. While the IRS maximum limit increased, employers offering DC-FSAs have the flexibility to set a limit lower than the IRS maximum to comply with IRS regulations. This provision is effective Jan. 1, 2026.

_{Source: “H.R.1 - 119th Congress (2025-2026): One Big Beautiful Bill Act.” Congress.gov, 2025. https://www.congress.gov/bill/119th-congress/house-bill/1?s=1&r=2. Accessed July 7, 2025.}