Key Updates to Health Savings Account Rules Impacting HDHPs and ACA Plans
Health Savings Accounts (HSAs) paired with High-Deductible Health Plans (HDHPs) are tax-advantaged tools for individuals to manage qualified medical expenses, provided they do not have other conflicting health coverage.
Recent legislative updates have extended the coverage of telehealth and remote services before deductibles for HSA-eligible HDHPs until the end of 2024, a move originally prompted by the COVID-19 pandemic to enhance access to remote care.\n\nStarting with plan years after December 31, 2024, new provisions affect the structuring and use of HSAs, including implications for ACA-compliant plans. Some bronze plans under the ACA could meet the deductible requirements for HSA pairing, yet other design features like out-of-pocket maximums may not comply with IRS rules, creating nuances in eligibility. Catastrophic plans remain excluded from HSA pairing due to their specific demographic focus and high cost-sharing requirements.\n\nLegislation effective January 1, 2026, will also impact the treatment of direct primary care (DPC) arrangements in relation to HSAs. Under current law, because some DPC arrangements may be classified as health plans, individuals enrolled in such plans face restrictions on HSA use. The new regulation intends to clarify this classification and potentially widen the use of HSAs for those in DPC arrangements.\n\nThe Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) anticipate that these changes to HSA rules will collectively reduce federal revenues by approximately $10.6 billion through 2034.
This projected decrease reflects increased flexibility and coverage scope of HSAs, affecting tax revenue but potentially offering greater HSA utility and adaptability for policyholders.\n\nThese regulatory adjustments underscore the evolving landscape of health plan designs and savings mechanisms, highlighting ongoing efforts to integrate telehealth services and alternative primary care models into benefit structures. Insurance professionals should monitor the implementation timelines and expenditure implications as these updates progress through the healthcare and insurance markets.