HSA Eligibility Expands for Millions of Americans in 2026

Health savings accounts (HSAs) have long been a popular choice for Americans looking to save for medical expenses while enjoying tax benefits. With the recent passage of the One Big Beautiful Bill Act in 2026, millions more Americans are now eligible to open and contribute to HSAs, expanding access to these valuable savings accounts.

Traditionally, HSAs were primarily available to individuals enrolled in high-deductible health plans (HDHPs) with specific criteria. However, the new law has opened up eligibility to three additional groups of people, potentially bringing in an estimated 3 to 4 million new account holders. This significant increase comes at a time when the HSA market already boasts around 40 million accounts holding nearly $160 billion in assets.

One of the key advantages of HSAs is their flexibility compared to other savings options like flexible spending accounts (FSAs). Unlike FSAs, HSA funds can roll over from year to year, contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free. This makes HSAs a powerful tool for saving for healthcare costs and even using them as a retirement account.

The new law expands HSA eligibility to individuals enrolled in bronze and catastrophic health plans offered through the Affordable Care Act marketplace. Previously, these plans did not meet the strict criteria set by the IRS for HDHPs, but now individuals can open and contribute to an HSA while enrolled in these plans. This change provides a valuable opportunity for individuals to offset out-of-pocket costs and make healthcare more affordable by saving pre-tax dollars.

Additionally, individuals using direct primary care (DPC) arrangements can now use HSA funds to pay for these services. DPC practices, where patients pay a monthly fee for primary care services, have become increasingly popular. Previously considered “other coverage” by the IRS, DPC arrangements are now eligible for HSA funds, allowing individuals to combine these services with the tax benefits of an HSA.

Furthermore, the new law allows individuals with HDHPs to access telehealth services before meeting their deductible without losing HSA eligibility. This change, retroactive to January 1, 2025, ensures that individuals can continue to use telehealth services without jeopardizing their HSA contributions. This policy shift removes a major barrier that previously hindered HSA growth, allowing individuals to benefit from cost savings and improved accessibility to virtual care.

In conclusion, the expansion of HSA eligibility under the One Big Beautiful Bill Act represents a significant step towards improving healthcare coverage, affordability, and access for millions of Americans. By leveraging the tax advantages and flexibility of HSAs, individuals can better prepare for medical expenses and secure their financial future.