High Deductible Health Plans (HDHPs) paired with Health Savings Accounts (HSAs) remain a cornerstone of modern benefits strategy. When executed correctly, they offer a powerful “triple tax advantage” for employees and lower premiums for employers. However, the federal rules governing these accounts are strict.
As we move into the 2026 plan year—and navigate new permanent changes brought on by the One Big Beautiful Bill Act (OBBBA)—it is critical for employers to audit their compliance to avoid costly excise taxes and employee relations issues.
- Verify Your HDHP Status (2026 Limits)
To be HSA-eligible, a health plan must meet specific IRS definitions for “High Deductible.” For plan years beginning in 2026, ensure your plan design matches these updated thresholds:
- Minimum Deductibles: $1,700 (Self-only) / $3,400 (Family)
- Out-of-Pocket Maximums: $8,500 (Self-only) / $17,000 (Family)
Crucial Check: If your family plan uses “embedded” deductibles, the individual deductible within the family plan cannot be lower than the family minimum of $3,400.
- Prevent FSA/HRA Disqualification Issues
An employee is generally ineligible to contribute to an HSA if they are covered by a general-purpose Flexible Spending Account (FSA) or Health Reimbursement Arrangement (HRA).
- The Grace Period Risk: If an employee has a remaining balance in a general-purpose FSA with a grace period, they cannot contribute to an HSA until the grace period ends.
- The Carryover Solution: To preserve HSA eligibility, employers should allow employees to either waive their FSA carryover or transition those funds into an “HSA-compatible” (Limited Purpose) FSA.
- Master the 2026 Contribution Limits
While employees are responsible for their own tax filings, employers play a vital role in preventing “excess contributions” through payroll.
- 2026 Limits: $4,400 (Self-only) / $8,750 (Family).
- Age 55+: Catch-up contributions remain a vital tool but require careful tracking.
- Correction Window: If a mistake is made, employees must distribute the excess funds by April 15 of the following year to avoid a cumulative 6% excise tax.
- Special Alert: Medicare and Age 65
Medicare eligibility is a common source of HSA compliance errors. Once an individual enrolls in any part of Medicare, they can no longer contribute to an HSA.
- The Retroactive Rule: If an employee applies for Medicare more than six months after turning 65, their coverage (and HSA ineligibility) may be backdated up to six months.
- Employer Action: Inform employees approaching age 65 to plan their “contribution stop date” carefully to avoid unintended tax penalties.
- Leverage Permanent Telehealth Flexibility
Because of the OBBBA (Notice 2026-5), the temporary “safe harbor” for telehealth has been made permanent. HDHPs can now provide first-dollar coverage for telehealth and remote care services before the deductible is met without disqualifying the HSA.
Why this matters: Incorporating pre-deductible telehealth reduces time away from work, increases productivity, and lowers overall claims costs by catching minor issues before they require an ER visit.
Compliance Resources
- IRS Publication 969: A guide for tax-favored health plans.
- IRS Notice 2026-5: Details on the permanent OBBBA telehealth extension.
For personalized assistance auditing your 2026 plan design, contact us today.