Good news for taxpayers! The One Big Beautiful Bill Act (OBBBA) has introduced significant improvements to Health Savings Account (HSA) eligibility and adoption tax benefits. These changes allow more people to qualify for HSA contributions and make adoption more affordable for many families. Here's what you need to know:
Expanded HSA Contribution Eligibility
Starting in 2025 and 2026, more people can now unlock the benefits of health savings accounts thanks to three key changes:
1. Telehealth Services Now Permanently Covered
Effective for plan years beginning January 1, 2025, high-deductible health plans (HDHPs) can permanently cover telehealth and remote care services before you meet your deductible—without disqualifying you from HSA contributions. This makes the temporary COVID-era relief permanent, allowing you to maintain HSA contribution eligibility while accessing virtual healthcare.
2. Bronze and Catastrophic Plans Now Qualify as HDHPs
Starting January 1, 2026, bronze and catastrophic health plans available through an Exchange (or identical plans sold off-Exchange) now qualify as HDHPs for HSA purposes, regardless of whether they meet traditional HDHP requirements. This means individuals with these plan types can now contribute to HSAs—something they generally couldn't do before.
3. Direct Primary Care Arrangements No Longer Disqualifying
Beginning January 1, 2026, enrollment in certain direct primary care service arrangements (DPCSAs) will no longer disqualify you from HSA contribution eligibility. These arrangements typically charge a fixed monthly fee (capped at $150 for individuals, $300 for families) for primary care services. Plus, you can use HSA funds tax-free to pay these periodic fees.
Enhanced Adoption Tax Credit
The OBBBA has also made adoption more affordable through improvements to the Adoption Tax Credit:
- Higher maximum credit: Up to $17,280 per eligible child for 2025
- Partially refundable: You can now receive up to $5,000 per qualifying child as a refund, even if you owe no taxes
- Expanded authority: Indian tribal governments can now determine special needs status, just like state governments
- Broad eligibility: Covers international, domestic, private, and public foster care adoptions
The credit applies to reasonable adoption fees, court costs, legal fees, travel expenses, and other adoption-related costs—even those paid before identifying a specific child.
What This Means for You
These changes represent significant opportunities to reduce your tax burden while accessing healthcare and building your family. However, the rules can be complex, and eligibility requirements vary based on your specific situation.
Whether you're considering an HSA contribution strategy or navigating adoption expenses, we're here to help you maximize these new benefits. The Treasury and IRS are still accepting comments on these provisions through March 6, 2026, so additional guidance may be forthcoming.
Do you have questions about how these changes affect your tax situation? Contact your accountant or the office at 614-891-5423. We're here year-round to provide the strategic guidance you need to make life #LessTaxing.