President Trump signed into law the One Big Beautiful Bill Act (OBBB) on July 4, 2025. The telehealth safe harbor, which allowed first dollar coverage of telehealth services without impacting Health Savings Account (HSA) eligibility for High Deductible Health Plan (HDHP) members during the COVID-19 pandemic, has returned in the OBBB. Read more about this safe harbor in our prior articles available here, here and here.
The OBBB amends Section 223 of the Internal Revenue Code (Code) to make the telehealth safe harbor permanent, effective for plan years beginning after December 31, 2024. This retroactive effective date closes any gap that might have existed with the prior temporary extension sunsetting at the end of 2024. For plan years beginning in 2025 and moving forward, access to pre-deductible telehealth and remote care services will not impact HSA eligibility.
Along a similar line to the telehealth safe harbor, the OBBB also amends Code Section 223 to create an exception preserving HSA eligibility for direct primary care (DPC) service arrangements. The exception allows individuals to be provided medical care under DPC services agreements without ruining HSA eligibility, so long as the services consist solely of primary care services and the aggregate fees for any month under such agreement do not exceed $150 for an individual (or $300 for family coverage). Additionally, DPC membership fees will now qualify as HSA-eligible expenses that can be reimbursed from an HSA, starting January 1, 2026.
Finally, while the OBBB does not contain other provisions to expand HSAs and health reimbursement accounts that were included in various drafts, the OBBB does impact another type of account-based plan, Dependent Care Assistance Programs (DCAP). The OBBB increases the contribution limits for a DCAP account under Code Section 129 from $5,000 if single or married and filing jointly to $7,500 (or from $2,500 if married and filing separately to $3,750, as applicable) effective for tax years beginning after December 31, 2025.
With the telehealth exception now permanent, employers can continue to offer their employees telehealth services at no cost before their HDHP deductibles have been met and telehealth services providers can structure their product offerings in a manner that does not differentiate between HDHP and non-HDHP members. Employers are also given additional flexibility in relation to the offering of primary care arrangements to their employees and expanding their DCAP benefits.
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