New Rules Aim to Broaden Appeal of H.S.A.s

By Ann Carns | Originally posted on The New York Times

Health savings accounts have lower premiums but higher deductibles. Now, more Obamacare plans can offer the accounts.

The new rules that kick in next year for health savings accounts may make the plans more attractive, as Americans consider their insurance options for 2026.

Changes enacted this summer, as part of the federal budget reconciliation law, tweaked the rules for the accounts, known as H.S.A.s, aiming to broaden their appeal.

The changes could attract as many as four million new H.S.A. participants, the research firm Morningstar estimated. There were about 40 million accounts holding almost $159 billion as of midyear, according to Devenir, an investment services firm specializing in the plans.

Here’s what to know about H.S.A.s for 2026.

How do health savings accounts work?

H.S.A.s let people set aside pretax money for health and medical care, whether they need it now or in the future. Funds not needed for current health care can be saved or invested to grow over time, providing funds for care later in life. Money in the accounts grows tax-free and is tax-free when withdrawn and spent on eligible care or products. (There’s no federal tax on the accounts, but some states, including California and New Jersey, assess state taxes.) If you have health coverage through your employer, you can take the account with you if you change jobs.

“They are the very best investment vehicle that exists,” said James Gelfand, the chief executive of the ERISA Industry Committee, a lobbying group for large employers that offer workplace benefits.