Notice 2026-5 — This notice provides guidance on changes relating to health savings accounts (HSAs) enacted by Pub.

Section 71306 of the OBBBA makes permanent a safe harbor for the absence of a deductible for telehealth and other remote care services that was initially enacted on a temporary basis as part of the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136, 134 Stat. 281 (Mar. 27, 2020) (CARES Act). The CARES Act provision was effective March 27, 2020, and applied for plan years beginning on or before December 31, 2021. Subsequent legislation extended the application through taxable years beginning before January 1, 2025. The OBBBA permanent extension applies retroactively for plan years beginning after December 31, 2024.

Section 71307 of the OBBBA amended section 223(c)(2) of the Code to provide that the term “high deductible health plan” includes any plan described in subsection (d)(1)(A) or (e) of section 1302 of the Patient Protection and Affordable Care Act (ACA) that is available as individual coverage through an Exchange. Section 1302(d)(1)(A) of the ACA describes a bronze level plan, which is required to provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan. Section 1302(e) of the ACA describes a catastrophic plan, which is a health plan solely offered in the individual market that does not provide bronze or higher levels of coverage and that generally provides essential health benefits only after an individual has incurred the maximum cost sharing under section 1302(c)(1) of the ACA (other than required preventive health care and coverage for at least three primary care visits). In addition, to be a catastrophic plan, enrollment must be restricted to individuals who have not attained the age of 30 before the beginning of the plan year or individuals who are exempt from the requirements of section 5000A because they do not have access to affordable coverage or are otherwise experiencing a hardship with respect to the capability to obtain coverage under a qualified health plan (QHP).

Before the OBBBA was enacted, many bronze plans did not qualify as HDHPs because the plans’ out-of-pocket maximum exceeded the statutory limits for HDHPs or because they provided benefits that were not preventive care without a deductible. Similarly, catastrophic plans could not be HDHPs because they were required to provide three primary care visits before the minimum deductible was satisfied and to have an out-of-pocket maximum that exceeded the statutory limits for HDHPs.

This provision amending the definition of an HDHP applies for months beginning after December 31, 2025.

An individual who is covered under an HDHP is eligible to contribute to an HSA, provided that the individual is not covered under any disqualifying coverage while the individual is covered under the HDHP. An HSA may be used to pay for medical care under section 213(d) of the Code; however, an HSA generally may not be used to pay for insurance, with certain exceptions.

The Treasury Department and the Internal Revenue Service (IRS) understand that direct primary care service arrangements (DPCSAs) typically charge a fixed periodic fee and provide for an array of primary care services and items, such as physical examinations, vaccinations, urgent care, laboratory testing, and the diagnosis and treatment of some sicknesses and injuries. For the purposes of eligibility to contribute to an HSA, this type of DPCSA generally would constitute a health plan that provides coverage before the minimum annual deductible is satisfied and that is not disregarded coverage or preventive care. Therefore, prior to the effective date of section 223(c)(1)(E) (as added by OBBBA), an individual generally was not eligible to contribute to an HSA if the individual was enrolled in a DPCSA.

Section 71308(a) of the OBBBA amended section 223(c)(1) of the Code to provide that a DPCSA as defined in section 223(c)(1)(E)(ii) is not “treated as a health plan for purposes of [section 223(c)(1)](A)(ii)”. which generally limits eligible individuals to individuals who are enrolled in an HDHP and are not covered under any other health plan. Thus, enrollment in such a DPCSA will not cause an individual to fail to be an eligible individual for that reason. For purposes of this rule, the term “direct primary care service arrangement” means, with respect to any individual, an arrangement under which such individual is provided medical care (as defined in section 213(d)) consisting solely of primary care services provided by primary care practitioners (as defined in section 1833(x)(2)(A) of the SSA, determined without regard to clause (ii) thereof), if the sole compensation for such care is a fixed periodic fee. “Primary care practitioner” is defined in section 1833(x)(2)(A) of the SSA to mean an individual who is a physician who has a primary specialty designation of family medicine, internal medicine, geriatric medicine, or pediatric medicine, or who is a nurse practitioner, clinical nurse specialist, or physician assistant. For purposes of section 223(c)(1)(E) of the Code, the term “primary care services” does not include (1) procedures that require the use of general anesthesia, (2) prescription drugs other than vaccines (therefore, vaccines are permitted primary care services), and (3) laboratory services not typically administered in an ambulatory primary care setting.

The term “direct primary care service arrangement” does not include any arrangement if, with respect to an individual for a month, the aggregate fees for all DPCSAs for the individual for a month exceed $150 (or $300 for any such arrangement that covers more than one individual). The aggregate limit is adjusted annually for inflation for taxable years after 2026.

Section 71308 of the OBBBA also amended section 223(d)(2)(C) of the Code to provide that any expense for coverage under “any direct primary care service arrangement” is not subject to the general restriction that prohibits an HSA from being used to pay for insurance.

The provision relating to DPCSAs applies to months beginning after December 31, 2025.

Q-11. Does a DPCSA under section 223(c)(1)(E) of the Code include an arrangement that provides certain healthcare items and services to individuals on the condition that they are members in the arrangement and have paid a fixed periodic fee, but bills separately for those items and services (through insurance or otherwise)?

A-11. No, the sole compensation for care provided under a DPCSA must be the fixed periodic fee. Thus, a DPCSA under section 223(c)(1)(E) does not include an arrangement that provides certain healthcare items and services to individuals on the condition that they are members in the arrangement and have paid a fixed periodic fee, but bills separately for those items and services (through insurance or otherwise).

Q-12. Does a DPCSA under section 223(c)(1)(E) of the Code include an arrangement in which providers participating in the arrangement, which otherwise qualifies as a DPCSA, offer certain healthcare items and services outside of the arrangement to individuals regardless of membership in the arrangement and separately bill both members and non-members for those items and services (through insurance or otherwise)?

A-12. Yes.

Q-13. May a DPCSA under section 223(c)(1)(E) include an arrangement that has fees that are billed for periods of more than a month but no more than a year?

A-13. Yes, a DPCSA under section 223(c)(1)(E) may include an arrangement that has fees that are billed for periods of more than a month, but no more than a year provided the aggregate fees are fixed, periodic, and do not exceed the monthly limit (on an annualized basis). For example, for 2026, the fee for a single individual could be $1,800 for a year; $900 for six months; or $450 for three months.

Q-14. If an arrangement provides services other than the primary care services described in section 223(c)(1)(E), may an individual who is a member in the arrangement decline to use such services and treat the arrangement as a DPCSA under section 223(c)(1)(E)?

A-14. No. Whether an arrangement qualifies as a DPCSA under section 223(c)(1)(E) depends on the terms of the arrangement, not the services used by an individual.

Q-15. May an HDHP offer primary care benefits other than those allowed under section 223(c)(2)(C)-(G) (for example, telehealth and preventive care) by paying fees for, or providing membership in, a DPCSA without a deductible or before the minimum deductible has been satisfied?

A-15. No. Certain DPCSAs are not treated as a health plan for purposes of section 223(c)(1)(A)(ii), which generally defines eligible individuals who may contribute to an HSA as individuals who are enrolled in an HDHP and are not covered under any other health plan. However, section 223 does not provide that an HDHP may offer a benefit that consists of paying fees for, or providing membership in, a DPCSA without a deductible or before the deductible has been satisfied.⁵

Q-16. If an individual is enrolled in both a DPCSA and an HDHP, may the HDHP count fees paid by the individual for the individual’s membership in the DPCSA toward the annual deductible and out-of-pocket maximum for the HDHP?

A-16. No. In this situation, the fees for membership in a DPCSA paid by the individual would not be amounts paid out-of-pocket for items and services that are covered by the HDHP and therefore would not count toward the minimum annual deductible and out-of-pocket maximum for the HDHP.

Q-17. Section 223(c)(1)(E) defines “primary care practitioners” by reference to section 1833(x)(2)(A) of the SSA. Does section 223(c)(1)(E) of the Code define “primary care services” by reference to the services identified by the Health Care Procedure Coding System (HCPCS) codes under section 1833(x)(2)(B) of the SSA?

A-17. No. Although section 223(c)(1)(E)(ii)(I) of the Code defines “primary care practitioners” by reference to section 1833(x)(2)(A) of the SSA, it does not define “primary care services” by reference to the definition at section 1833(x)(2)(B) of the SSA. In addition, section 223(c)(1)(E)(iii) of the Code specifically excludes from “primary care services” (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.

Q-18. Are DPCSA fees treated as amounts paid for qualified medical expenses under section 223(d)(2) that may be reimbursed by an HSA if they were paid by an individual’s employer, including by salary reduction through a section 125 cafeteria plan?

A-18. No. These payments by the employer are not expenses of the HSA beneficiary. The payments are compensation excluded from employees’ gross income under section 106.

Q-19. May DPCSA fees be reimbursed from an HSA before the coverage period for the arrangement?

A-19. Generally, yes. An HSA is permitted to treat an expense for a DPCSA as incurred on (1) the first day of each month of coverage on a pro rata basis, (2) the first day of the period of coverage, or (3) the date the fees are paid. Thus, for example, an HSA may immediately reimburse a substantiated fee for a DPCSA that begins on January 1 of that enrollment year, even if the enrolled individuals paid the fee prior to the first day of the enrollment year.

Q-20. What requirements must an arrangement meet in order to qualify as a DPCSA whose fees are treated as amounts paid for qualified medical expenses under section 223(d)(2) that may be reimbursed by an HSA?

A-20. For purposes of section 223(d)(2), a DPCSA is an arrangement under which an individual is provided medical care (as defined in section 213(d)) consisting solely of primary care services provided by primary care practitioners (as defined in section 1833(x)(2)(A) of the SSA, determined without regard to clause (ii) thereof), if the sole compensation for such care is a fixed periodic fee, and such care does not include (1) procedures that require the use of general anesthesia, (2) prescription drugs other than vaccines, or (3) laboratory services not typically administered in an ambulatory primary care setting. For purposes of section 223(d)(2), there is no specific limit on the amount of the fixed periodic fee as there is for purposes of determining whether a DPCSA is a health plan under section 223(c)(1)(E). Thus, fees for a DPCSA that do not satisfy the monthly dollar limit in section 223(c)(1)(E)(ii)(II) will be treated as medical expenses reimbursable from an HSA in accordance with section 223(d)(2)(C)(v) but will disqualify the covered individual from eligibility for making HSA contributions while the individual is enrolled.