The ‘One Big Beautiful Bill’ Expands on HSAs

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law, a sweeping tax and spending measure that includes implications for health savings accounts and employer-sponsored benefits.

While an early version of the bill passed by the House of Representatives promised broad reforms to group health insurance, most of those provisions were ultimately stripped from the final version. What remained were a handful of updates — centered on HSAs — that will affect how employers structure and manage high-deductible health plans (HDHPs) and related benefits moving forward.

The final bill significantly expands access and flexibility for HSAs. These updates take effect in 2025 and 2026 and mark the most substantial set of HSA reforms since the accounts were created.

Permanent telehealth compatibility with HDHPs

Effective for plan years beginning on or after Jan. 1, 2025, HDHPs can now offer first-dollar coverage of telehealth services without jeopardizing HSA eligibility.

This provision makes permanent a temporary COVID-era relief measure that was previously set to expire. Employers can now continue offering or reintroduce $0 telehealth visits under their HDHPs without disqualifying employees from contributing to HSAs.

Direct primary care arrangements now HSA-Compatible

Beginning Jan. 1, 2026, individuals enrolled in direct primary care arrangements, which are subscription-based models for routine and preventive care, will remain eligible to contribute to HSAs.

The law sets monthly caps on reimbursable DPC fees: $150 per individual and $300 per family. DPC payments within those limits are also now classified as qualified medical expenses, meaning they can be reimbursed from HSA funds.

Marketplace plans HSA-eligible

Starting in 2026, individuals enrolled in Bronze or Catastrophic-level Affordable Care Act marketplace plans will be allowed to open and contribute to HSAs. This is a significant departure from current rules, which generally require enrollment in HDHPs that meet strict federal design criteria.

The change may be particularly relevant for employers offering Individual Coverage HRAs (ICHRAs) or Qualified Small Employer HRAs (QSEHRAs), as it expands the range of employee-selected plans that maintain HSA eligibility.

What was left out of the final bill

Despite significant momentum in earlier versions of the bill, several proposed reforms to group health insurance and employer-sponsored benefits did not make it into the law.

• ICHRA cafeteria plan limitations: Proposals to rebrand ICHRAs as “CHOICE Arrangements” and allow employees to use cafeteria plans to pay for exchange-based individual coverage with pre-tax dollars were removed. As a result, the regulatory status quo remains, and such premiums must still be paid with after-tax income.
• HSA contributions for seniors: A proposed change allowing working individuals over age 65 to continue contributing to HSAs was not included.
• Gym membership reimbursements via HSAs: Earlier drafts allowed HSA funds to be used for fitness costs — this too was scrapped.
• Increased HSA contribution caps based on income: Proposals to allow higher earners to contribute more to HSAs based on income levels were eliminated from the final law.
• Expanded catch-up contributions for married couples: The provision allowing joint catch-up HSA contributions to a single account for married couples filing jointly did not survive.
• Rollovers from FSAs/HRAs to HSAs: A rule allowing limited rollovers from terminating flexible spending or health reimbursement arrangements into HSAs was dropped.

Implications for employer plans

While the final law has narrowed in focus, its HSA-related provisions will still impact how many employers approach plan design.

• Strategic use of telehealth and DPC arrangements. Employers can now build HDHPs that include robust virtual and primary care access without affecting employee HSA eligibility. This flexibility may allow for more cost-efficient, employee-friendly benefit structures.
• Expanded HSA access for ICHRA offerings. For employers offering ICHRAs or QSEHRAs, the inclusion of Bronze and Catastrophic marketplace plans as HSA-eligible opens a wider range of plan options for employees, potentially improving satisfaction and adoption.
• Administrative action required. Employers choosing to take advantage of these new flexibilities must work with legal counsel, third-party administrators or their broker to ensure plan documents, enrollment materials and employee communications are updated ahead of the 2026 changes.

Bottom line

The One Big Beautiful Bill ultimately delivered modest but meaningful changes for employers offering HDHPs and HSAs. While many had hoped for a broader overhaul of group health insurance and reimbursement arrangements, the final law doubled down on expanding the use and appeal of HSAs — giving employers more tools to offer flexible, consumer-driven health benefits in an evolving landscape.

If you have questions about how this may affect your current health plan and how it expands your options, please give us a call.