Blog · 15 October 2026

HSA Eligibility Under Notice 2026-05: Bronze and Catastrophic Plans, Telehealth and Direct Primary Care — What US CPA Firms Should Tell Clients

By Keshav Bansal, CA

HSA eligibility expanded under IRS Notice 2026-05 (PDF header: Notice 2026-5; IR-2025-119, December 9, 2025). For US CPA firms with individual and small-business clients on Marketplace bronze or catastrophic coverage, telehealth-first HDHPs, or direct primary care memberships, the notice answers how IRC §223 works after OBBBA (P.L. 119-21) §§71306–71308—without waiting for final regulations.

HSA basics and the 2026 dollar limits

Under §223, only an “eligible individual” may contribute to a Health Savings Account: generally someone covered by a high deductible health plan (HDHP) with no other disqualifying coverage. HSA dollars have the familiar triple tax advantage—deductible or pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. Unused balances roll over and stay portable with the account owner.

Notice 2026-05’s footnote 1 restates Rev. Proc. 2025-19 for calendar year 2026: contribution limits of $4,400 (self-only) and $8,750 (family); ordinary HDHP minimum deductibles of $1,700 / $3,400 and out-of-pocket caps of $8,500 / $17,000 (excluding premiums). Bronze and catastrophic plans treated as HDHPs under the new rule are an explicit exception to those floors and caps.

Telehealth before the deductible—now permanent

OBBBA §71306 made permanent the safe harbor that lets an HDHP cover telehealth and other remote care before the minimum deductible without losing HDHP status. Per the notice, the permanent rule applies for plan years beginning after December 31, 2024. Q&A-1 confirms that an otherwise eligible individual may contribute for 2025 even if telehealth-before-deductible coverage began before OBBBA’s July 4, 2025 enactment, and even if the contribution itself was made before that date—so long as the plan otherwise met HDHP requirements.

Q&A-2 ties “telehealth and other remote care services” to the annual HHS Medicare telehealth list under SSA §1834(m)(4)(F), plus principles from §1834(m), 42 CFR 410.78, and other HHS guidance for services not on the list. Q&A-3: in-person services, medical equipment, or drugs connected to a telehealth visit are not covered by the safe harbor unless they independently qualify as telehealth under that guidance.

Bronze and catastrophic plans as HDHPs from 2026

OBBBA §71307 adds §223(c)(2)(H): for months beginning after December 31, 2025, a bronze plan (ACA §1302(d)(1)(A)) or catastrophic plan (ACA §1302(e)) that is available as individual coverage through an Exchange is treated as an HDHP. Q&A-4 states that treatment applies even when the plan fails the usual §223(c)(2)(A) minimum-deductible or maximum out-of-pocket tests—exactly why many bronze and catastrophic products could not support HSA contributions before.

Notice 2026-05 also clarifies (and IR-2025-119 summarizes) that purchase through an Exchange is not always required in practice:

• Mirrored off-Exchange plans (Q&A-6): a bronze or catastrophic plan bought off-Exchange still counts if the same plan is available as individual coverage through an Exchange, including identical off-Exchange versions sold without a cost-sharing-reduction load.
• No-reason-to-believe relief (Q&A-7): if the individual enrolls in a bronze or catastrophic individual-market plan that is not on an Exchange, and has no reason to believe it is unavailable on an Exchange, the IRS will treat the person as an eligible individual.
• ICHRA funding (Q&A-5): using an employer individual coverage HRA to buy the plan does not, by itself, spoil HDHP treatment—but an HRA that reimburses non-premium medical expenses before the deductible can still be disqualifying other coverage (Notice 2008-59 Q&A-1).
• SHOP (Q&A-8): SHOP coverage is generally not “individual coverage,” so it does not ride on §223(c)(2)(H); it is an HDHP only if it meets the ordinary deductible and out-of-pocket rules.

For clients comparing Marketplace options with APTC repayment risk after OBBBA—covered in our advance premium tax credit repayment post—bronze HSA eligibility is a new planning variable for 2026 open enrollment and mid-year ICHRA designs.

Direct primary care: eligibility and HSA reimbursements

OBBBA §71308 adds §223(c)(1)(E): a qualifying direct primary care service arrangement (DPCSA) is not treated as a disqualifying “health plan” for eligibility purposes, for months beginning after December 31, 2025. The statute’s DPCSA is medical care under §213(d) consisting solely of primary care services from primary care practitioners (SSA §1833(x)(2)(A) specialties and non-physician practitioners), for a fixed periodic fee only. Primary care services exclude procedures needing general anesthesia, prescription drugs other than vaccines, and lab work not typically done in an ambulatory primary-care setting.

For the eligibility carve-out, aggregate DPCSA fees for a month may not exceed $150 (or $300 if the arrangement covers more than one individual); the cap is inflation-adjusted for taxable years after 2026. Q&A-13 allows billing periods longer than a month but not more than a year if fees stay fixed, periodic, and within the monthly limit on an annualized basis—for 2026, examples include $1,800 per year, $900 per six months, or $450 per three months for a single individual.

Two traps: Q&A-15—an HDHP may not pay DPCSA fees or provide DPCSA membership before the deductible (DPC must sit outside the HDHP for pre-deductible use); and Q&A-20—fees above the $150/$300 monthly eligibility cap can still be reimbursed from an HSA under amended §223(d)(2)(C), but those arrangements disqualify contributions while the individual is enrolled. Q&A-18: employer-paid DPCSA fees (including cafeteria salary reduction) are §106 compensation, not HSA-reimbursable expenses of the beneficiary.

What US CPA firms should tell clients now

• Screen 2026 bronze/catastrophic enrollees for HSA eligibility under §223(c)(2)(H), including mirrored off-Exchange and ICHRA-funded individual coverage—and keep SHOP clients on the ordinary HDHP tests.
• Confirm telehealth product scope against the HHS Medicare telehealth list (and Q&A-3’s in-person/drug/equipment limit) before treating pre-deductible telehealth as HDHP-safe for 2025–2026 contributions.
• Inventory DPC memberships: fixed periodic fee only, practitioner types, excluded services, and whether monthly fees stay at or under $150/$300 if the client still wants to contribute.
• Separate contribution eligibility from distribution rules when DPC fees exceed the monthly cap—reimbursement may still be allowed while contributions are not.
• Update organizers for the Rev. Proc. 2025-19 limits ($4,400 / $8,750) alongside other OBBBA work such as draft 2027 Form W-4 and 2026 QBI / §199A.

A short firm checklist

1. Flag every 2026 bronze or catastrophic individual-market client and document Exchange availability or Q&A-7 “no reason to believe” facts.
2. Ask HDHP clients whether telehealth or remote care is covered before the deductible and whether any bundled in-person drugs or equipment ride along.
3. Collect DPC contracts: fee schedule, covered services, billing period, and who pays (employee after-tax vs employer/cafeteria).
4. Rebuild contribution projections using $4,400 / $8,750 (and age-55+ catch-up where it applies); watch Notice 2026-05 comments (due March 6, 2026) for further DPC guidance.

Where this fits for Tax Brew readers

Notice 2026-05 is operational §223 guidance already in force for telehealth plan years and, from January 2026, for bronze/catastrophic HDHP treatment and qualifying DPC. Firms need eligibility screens—not a wait for final regs.

If HSA contribution tracking, Marketplace income workpapers or year-end benefit reconciliations are stretching capacity, outsourced tax prep and bookkeeping support for US CPA firms can take the data gathering while your signing professionals keep the judgment calls. Email info@taxbrewglobal.com.

Check current IRS guidance: Notice 2026-05 / Notice 2026-5 (irs.gov/pub/irs-drop/n-26-05.pdf); IR-2025-119 (December 9, 2025); IRC §223 as amended by P.L. 119-21 §§71306–71308; Rev. Proc. 2025-19; Notice 2008-59; Notice 2012-14 (modified). Confirm current IRS.gov guidance before advising clients. General information, not tax or legal advice. Sources as of 15 October 2026.