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On December 9, 2025, the Internal Revenue Service (IRS) provided clarifying guidance in Notice 2026-5 (the Notice) regarding several account-based health plan provisions contained in the One Big Beautiful Bill Act (OBBBA). The Notice includes language specifically including off-Exchange plans in the OBBBA's high-deductible health plan (HDHP) relief for bronze and catastrophic plans, which is a welcome clarification for the individual coverage health reimbursement arrangement (ICHRA) industry. This article summarizes some of the key provisions of the Notice and their implications.
Bronze and Catastrophic Plans
The OBBBA reclassified bronze and catastrophic Exchange plans as qualifying HDHPs, allowing them to be paired with a health savings account (HSA). The Notice expressly confirms that enrollment in an ICHRA does not change this favorable HDHP status. The Notice states that a bronze plan or catastrophic plan purchased off-Exchange on the individual market will be treated as an HDHP if the same plan is available as individual coverage through an Exchange (often called "mirrored" plans). This interpretation of the OBBBA is one that Foley & Lardner LLP (Foley) was involved in advocating for after passage of the OBBBA. Because on and off Exchange plans have different tax implications for payment of employee premiums under an ICHRA, limiting this provision of the OBBBA only to on-Exchange plans would have greatly limited its effect.
In addition, the Notice provides certain relief for non-mirrored off-Exchange plans. It states that the IRS will treat an individual as HSA-eligible if the individual enrolls in a bronze or catastrophic plan off the Exchange, even when that same plan is not sold on the Exchange, assuming the individual has no reason to believe that the plan is sold solely off the Exchange. This can effectively operate to provide non-mirrored off-Exchange plans with the same favorable HDHP status as mirrored off-Exchange plans (in most cases). This was another area where Foley was involved in advocacy after the OBBBA was passed, to ensure that ICHRA members were not punished for enrolling in a non-mirrored off-Exchange bronze or catastrophic plan without knowledge of this nuance.
Telehealth Exception
The OBBBA created a permanent telehealth safe harbor, allowing for first dollar coverage of telehealth services without impacting HSA eligibility for HDHP members. Read more about this safe harbor in our prior article here. The Notice confirms that the effective date of the safe harbor was retroactive and that services subject to this safe harbor include those telehealth services payable by Medicare as published in its annual list. Services not included on such list should be assessed based on other guidance published by the Department of Health and Human Services.
Direct Primary Care Service Arrangement
The OBBBA also created a safe harbor preserving HSA eligibility related to direct primary care service arrangements (DPCSA). The Notice confirms that a fixed periodic fee is the only DPCSA qualifying payment structure. The Notice also states that fees for membership in a DPCSA paid by an individual would not count towards the minimum annual deductible and out-of-pocket maximum for the HDHP. However, DPCSA fees that meet the limit established under the OBBBA could be reimbursed under the HSA as expenses for medical care.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
