A Big, Beautiful HSA Expansion
By Roy Ramthun | HSA Consulting Services
The U.S. Congress passed the biggest expansion of Health Savings Accounts since they were enacted in 2003. It is unfortunate that it takes an Act of Congress to make these changes because the opportunities have not come along very often. The last time Congress got this close was 2018, but the vote of one Senator made HSA supporters wait another seven years. Now it has happened and it sure feels good!
To be sure, only three provisions passed the Congress today rather than ten provisions which passed the House six weeks ago. Such is the “sausage making” process of writing laws. However, the three provisions that did pass should have a big impact on millions more Americans and on how health care is financed in this country. Here is a quick summary of these provisions.
The first provision deems all Bronze and Catastrophic plans sold to individuals on the state health insurance marketplaces as “HSA-qualified” health insurance plans, meaning every adult who purchases one of these plans will become eligible to establish and contribute to an HSA after they sign up. The next opportunity to do so will be during the open enrollment period at the end of this year for coverage beginning January 1, 2026.
Bronze and Catastrophic plans have the lowest premiums but also have the highest out-of-pocket expenses, so having the opportunity to set aside money in an HSA and save on taxes at the same time will provide a tremendous boost to policy holders and their families.
The second provision solves a somewhat arcane HSA problem for individuals and families that have a special arrangement with their primary care doctor, known as a “direct primary care” arrangement. Under these arrangements, people pay their doctor a monthly (or annual) fee instead of paying their doctor only when they are seen in person. Today, DPC arrangements disqualify Americans from contributing to an HSA because the arrangements are incompatible with the current rules for eligibility to contribute to an HSA. No longer, starting January 1, 2026.