It’s official! The One Big Beautiful Bill is now the law of the land. And somewhere in those 870 pages it created The One Big Beautiful HSA.
The health savings account (HSA) was an innovative idea introduced in 2004 that allows people with high-deductible health plans (HDHP) to pay for out-of-pocket medical expenses with pre-tax dollars. Contributions to an HSA are tax-deductible and as long as withdrawals are used to pay for qualified medical expenses, (things like deductibles, copays, coinsurance or services not covered by insurance) the withdrawals are tax-free.
The Rules
- You must be enrolled in a HDHP. In 2025 that’s defined as:
- A self-only plan requiring $1,650 be paid out-of-pocket before insurance begins to pay and an out-of-pocket maximum not to exceed $8,300.
- A family plan requiring $3,300 be paid out-of-pocket before insurance begins to pay and an out-of-pocket maximum not to exceed$16,600.
- The HSA contribution limits for 2025 are:
- $4,300 for self-only coverage
- $8,550 for family coverage.
- Those 55 and older can contribute an additional $1,000 as a catch-up contribution.
- You can’t have other health coverage that’s not a high-deductible health plan (HDHP).
- You can’t be claimed as a dependent on someone else’s tax return.
- You can’t be enrolled in Medicare
- If your HSA is through an employer, the account is “portable” meaning your account can be carried to a new job or retained upon retirement or loss of work.
The Big Beautiful Additions to HSAs
As good as health savings accounts have been, the new legislation makes significant changes to HSAs, including expanded eligibility, increased contribution limits, and new permissible uses for HSA funds. For example:
- Many plans in the Affordable Care Act (ACA) marketplace did not qualify as HDHPs, so enrollees in those plans could not make HSA contributions. Under the new law, ACA “Bronze” and “Catastrophic” plans are treated as HDHPs, allowing enrollees in those plans to contribute to HSAs.
- Individuals enrolled in Direct Primary Care Arrangements (DPCA), where a monthly fee covers primary care services, were previously ineligible for HSAs. Now, as long as DPCA monthly fees don’t exceed $150 for individual coverage or $300 for family coverage, individuals in DPCA plans can participate in HSAs and use their HSA funds to pay for the monthly DPCA fees.
- HSA contribution limits are going up. In 2026, individuals will be able to contribute up to $4,400 and those with family coverage have a $8,750 maximum.
- The legislation permanently reinstates the pandemic-era provision that allows HSA-qualified HDHPs to cover telehealth services before the deductible is met without affecting HSA eligibility.
HSA recommendations that did not make the final bill included:
- Allowing individuals with Medicare Part A to make HSA contributions.
- Allowing HSAs to pay for fitness expenses.
- Allowing both spouses 55 years old and older to make their $1,000 catch-up contributions to the same HSA.
Many of the changes in the bill signed into law, such as the ones related to DPCAs and expanded eligibility for Bronze and Catastrophic plans, will take effect on January 1, 2026. The telehealth provision is retroactive to January 1, 2025.
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