New HSA Flexibility Requires Careful Health Plan Design Review

OCTOBER 6. 2026

Recent regulatory changes have relaxed certain eligibility restrictions for health savings accounts (HSAs). As a result, employers may have more flexibility to expand access to telehealth services, direct primary care (DPC) arrangements, and other coverage options. While these changes create new opportunities to enhance healthcare benefits, employers should not assume that offering these programs will automatically preserve HSA eligibility. Program structure and plan design remain critical considerations.

Changes May Expand Access While Preserving Eligibility

HSAs allow eligible individuals to save and pay for healthcare expenses on a tax-advantaged basis. To be eligible to contribute to an HSA, individuals must:

• Be enrolled in a qualified high-deductible health plan (HDHP)
• Have no other disqualifying health coverage (i.e., other non-HDHP health coverage)
• Not be enrolled in Medicare
• Not be claimed as a dependent on another person’s tax return

Although regulatory changes have loosened some prior restrictions related to disqualifying coverage, several compliance challenges remain.

Qualifying Telehealth Services

In July 2025, Congress permanently extended the ability for HDHPs to cover telehealth and remote care services before a plan member meets the annual deductible. Telehealth is generally treated as disregarded coverage that doesn’t jeopardize an individual’s ability to contribute to an HSA.

Recent IRS guidance clarified that this telehealth safe harbor is narrower than employers and vendors initially assumed. To qualify for the safe harbor, services generally must satisfy applicable telehealth requirements and fall within permitted categories of care. Some items connected to a telehealth program, including certain in-person services, medical equipment, and prescription drugs, may still raise HSA eligibility concerns if they are provided before the deductible is met.

While offering free or reduced-cost telehealth is not required, this relief gives employers an opportunity to provide access to additional care options without jeopardizing an employee’s ability to contribute to an HSA.

Direct Primary Care Arrangements

Beginning in 2026, certain DPC arrangements no longer disqualify HSA eligibility, and qualifying fees may be reimbursable through an HSA. To preserve HSA eligibility, DPC arrangements generally must not exceed $150 per month for individual coverage or $300 per month for family coverage.¹

The arrangement also must consist solely of primary care services provided by qualifying primary care practitioners. For this purpose, “primary care” excludes procedures that require the use of anesthesia, prescription drugs (other than vaccines), and laboratory services not typically administered in an outpatient primary care setting.

Programs that bill separately for services or extend beyond permitted services may not qualify. Exceeding the applicable monthly limits can also affect HSA eligibility, even if the arrangement otherwise appears compliant.

Employers considering adding a DPC arrangement alongside an HDHP with an HSA should carefully evaluate the program design to confirm that it meets IRS guidance for HSA compatibility. 

Additional Considerations for HDHPs With HSAs 

When considering an HDHP with an HSA, several other requirements tend to get overlooked. However, these can be easy to fix if caught before the plan year begins:

• Deductibles and out-of-pocket maximums must meet IRS guidelines for the plan year in order to be considered a qualifying HDHP. Extra care should be taken in evaluating any embedded individual deductibles to ensure they’re not below the family coverage minimum deductible ($3,500 for 2027).
• Cafeteria plan documents should be amended to include employee pre-tax salary reduction contributions and any employer contributions to the HSA.
• Employees who are enrolled in Medicare are not eligible to establish or contribute to an HSA.
• Traditional health flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) both count as HSA-disqualifying coverage. Employers that offer these arrangements should consider HSA-compatible options, such as a limited-purpose health FSA.