Last Updated on January 13, 2026 by MyHRConcierge

The Internal Revenue Service (IRS) has issued new guidance clarifying several important updates to Health Savings Accounts (HSAs), reflecting recent legislative changes and modern healthcare delivery trends. The guidance, primarily outlined in IRS Notice 2026-05, expands HSA compatibility for certain health plan features and coverage types beginning in the 2025 and 2026 plan years. Employers, HR professionals and benefits administrators should carefully review these changes, as they present both new compliance considerations and opportunities to enhance benefits offerings.

Permanent Telehealth Safe Harbor for HSA-Eligible Plans

One of the most significant developments in the IRS’s newest guidance is the permanent extension of the telehealth safe harbor for HSA-eligible high deductible health plans (HDHPs). Previously enacted as temporary relief during the COVID-19 public health emergency, this provision allows HDHPs to cover telehealth and other remote care services before a participant satisfies the plan deductible without disqualifying HSA eligibility. Under the new guidance, this flexibility is retroactive for plan years beginning on or after January 1, 2025.

This change enables employers to continue offering pre-deductible telehealth benefits while preserving employees’ ability to contribute to HSAs. The IRS’s action reflects the continued integration of virtual care into standard healthcare delivery and provides employers with greater certainty when designing HDHP benefits.

Expanded HSA Eligibility for Bronze and Catastrophic Health Plans

Beginning January 1, 2026, the IRS will treat bronze and catastrophic health plans as HSA-compatible HDHPs for purposes of HSA eligibility. This applies regardless of whether the coverage is purchased on or off the Health Insurance Marketplace. Historically, these plan types were excluded from HSA eligibility because they did not meet certain statutory HDHP requirements related to deductibles and cost-sharing.

By treating these plans as HDHPs for HSA purposes, the IRS has broadened access to HSAs, particularly for individuals and employers utilizing lower-premium plans with higher cost-sharing structures. Employers offering or considering these plan designs should prepare for expanded HSA eligibility beginning in the 2026 tax year.

IRS Clarification on Direct Primary Care Arrangements

The newest IRS guidance also addresses the interaction between HSAs and direct primary care (DPC) service arrangements. Effective January 1, 2026, certain DPC arrangements will not disqualify an otherwise eligible individual from making HSA contributions. In addition, HSA funds may be used on a tax-free basis to pay periodic fees associated with qualifying DPC services.

This clarification provides additional flexibility for employers and employees exploring alternative healthcare delivery models while maintaining the tax-favored status of HSAs. Employers considering DPC options should ensure these arrangements meet IRS requirements to avoid unintended eligibility issues.

Employer Compliance and Plan Considerations

Employers and benefits professionals should review existing health plan offerings to determine how the new guidance may affect plan design and administration. Telehealth benefits should be evaluated to ensure they align with IRS criteria for pre-deductible coverage under HDHPs. Organizations offering bronze or catastrophic plans should prepare for expanded HSA eligibility beginning in 2026, including potential payroll and administrative updates. Employers utilizing or exploring direct primary care arrangements should also coordinate with advisors to confirm compliance with IRS rules.

Final Thoughts

The IRS’s newest HSA guidance represents a meaningful step toward modernizing HSA rules to reflect evolving healthcare practices. By permanently allowing pre-deductible telehealth coverage, expanding HSA eligibility to additional health plan types and clarifying the treatment of direct primary care arrangements, the IRS has created new opportunities for employers to enhance benefits offerings while preserving the tax advantages HSAs provide. Proactive planning and communication will be key to ensuring compliance and maximizing the value of these changes for both employers and employees. Reach out to your Broker for more information on the newest HSA guidance.