The IRS provided guidance in Notice 2026-05 on new tax benefits for health saving account (HSA) participants under the One Big Beautiful Bill Act (OBBBA). Those changes expand HSA eligibility, allowing more people to save and pay for healthcare costs through tax-free HSAs by making the following changes:
- Telehealth and remote care services – The OBBBA made permanent the ability to receive telehealth and other remote care services before meeting the high-deductible health plan deductible while remaining eligible to contribute to an HSA, effective for plan years beginning on or after Jan. 1, 2025.
- Bronze and catastrophic plans treated as HDHPs – As of Jan. 1, 2026, bronze and catastrophic plans available through an exchange are considered HSA-compatible, regardless of whether the plans satisfy the general definition of an HDHP. This expands the ability of people enrolled in these plans to contribute to HSAs, which they generally haven’t been able to do in the past. Notice 2026-05 clarifies that bronze and catastrophic plans don’t have to be purchased through an exchange to qualify for the new relief.
- Direct primary care service arrangements – Beginning Jan. 1, 2026, an otherwise eligible individual enrolled in certain direct primary care arrangements may contribute to an HSA. In addition, they may use their HSA funds tax-free to pay periodic DPC fees.
The Treasury Department and IRS are asking the public to comment on all aspects of this notice by March 6, 2026. Commentors are encouraged to use the Federal e-Rulemaking portal to submit comments online.
2026 HSA Contribution Limits
The chart below details the 2026 HSA contribution limits. Since the start of 2025, the amounts allowed have increased for both individuals and families. An additional $1,000 can be contributed on top of the limitations described if the individual is 55 years of age or older, which will not increase for the 2026 calendar year.
| Accounts | Type of Coverage | 2026 | 2025 |
| Minimum deductible amounts for the qualifying High-Deductible Health Plan (HDHP) | Individual coverage | $1,700 | $1,650 |
| Family coverage | $3,400 | $3,300 | |
| Maximum contribution HSA | Individual coverage | $4,400 | $4,300 |
| Family coverage | $8,750 | $8,550 | |
| Catch-up contributions allowed for those 55 years of age and over | $1,000 | $1,000 | |
| Maximums for HDHP out-of-pocket expenses | Individual coverage | $8,500 | $8,300 |
| Family coverage | $17,000 | $16,600 |
Advantages for Employers
There are multiple employer benefits when it comes to offering an HSA to employees, including lower payroll costs, a federal tax deduction and reduced administrative burden.
Neither employers nor employees are required to pay payroll taxes on HSA contributions deducted through payroll. Employers can claim a federal income tax deduction for contributions made to employees’ HSA accounts, including those made via payroll deduction. This results in reduced Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) taxes for employers.
Employees have the freedom to withdraw funds from their HSA accounts at any time without needing employer involvement, as the funds are solely theirs during and after employment. If money is taken from the HSA for something other than a qualified HSA expense, the distribution is taxed as regular income and there is a 20% tax on the amount withdrawn. This reduces the administrative burden on employers when offering this benefit. However, employers must accurately report HSA contributions on employees’ Forms W-2.
We’re Here to Help
We offer access to end-to-end payroll solutions that help organizations manage benefits administration through an online portal. Automatic workflows transfer demographic information, payroll deductions and compensation adjustments between our system and benefit management systems, streamlining the process for businesses. Contact us today to learn more.
