January 2026
Diana Craig, Director Benefits Compliance
In December 2025, the IRS issued Notice 2026-5, which offered additional guidance about Health Savings Account (“HSA”) flexibilities included in the One Big Beautiful Bill Act (“OBBBA”). Most notably for group health plans, this new FAQ guidance addresses the now permanent safe harbor allowing telehealth (and other remote care services) to be offered below the deductible of an HSA-compatible High Deductible Health Plan (“HDHP”) and new rules allowing qualifying Direct Primary Care Arrangements (“DPC/DPCA”) to be offered below the deductible of an HDHP and allowing the payment of certain DPC fees from HSAs.
Telehealth flexibility for HSA-compatible HDHPs was originally part of the 2020 Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and was repeatedly extended through December 31, 2024. OBBBA made this telehealth-HSA relief permanent retroactively to plan years beginning in 2025. Although telehealth and remote care services have not been well defined, the FAQ guidance clarifies that a plan will remain HSA-compatible if it offers telehealth benefits for services included on Medicare’s telehealth services list, creating a “safe harbor” for listed services. Importantly, the guidance also states that the safe harbor does not extend to in-person services, medical equipment, or prescription drugs delivered in connection with a telehealth visit. However, any of those ancillary services or items could still be provided below the HDHP deductible if they qualify as preventive care under the Affordable Care Act (“ACA”) or Internal Revenue Code § 223.
Although OBBBA also allowed DPC to be offered below the deductible of an HSA-compatible HDHP and the payment of certain DPC fees from HSAs, the statutory definition of DPC limited what arrangements could be covered by this relief. Under OBBBA, HSA-compatible DPC does not include: (1) procedures that require the use of general anesthesia; (2) prescription drugs other than vaccines; and (3) laboratory services not typically administered in an ambulatory primary care setting. DPC also does not include any arrangement if the fees for an individual for a month exceed $150 (or $300 for more than one individual). The FAQ guidance further limits HSA-compatible DPCA by clarifying that the sole compensation paid to providers is limited to this fixed fee and that no items and services can be billed separately (through insurance or otherwise). Any such services would have to be offered outside of the DPCA to individuals regardless of membership in the DPCA and would have to be separately billed to both members and nonmembers for those items and services. Moreover, participants in a broader DPC arrangement could not decline services outside of the OBBBA definition to make that broader DPC arrangement HSA-compatible. Lastly, DPC fees do not count as out-of-pocket costs for HDHP.
IRS has requested public comments on all aspects of Notice 2026-05 by March 6, 2026.
Employer Action Items
- Review telehealth arrangements: Reach out to insurance companies and third-party administrators about HSA compatibility under OBBBA if HSA-compatible plans offer telehealth.
- Explore DPC coverage options: Vendors may still be adjusting to how OBBBA defines HSA-compatible DPC. If interested in adding a DPCA, partnering with a vendor that understands OBBBA rules is key.
For more information
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