What’s Changing in 2026 with HRAs and HSAs: A New Era for Employer Health Benefits

Health Reimbursement Arrangements (HRAs) have long been a flexible, tax-advantaged option for employers to support their teams’ healthcare needs. And now, with the passage of the One Big Beautiful Bill Act (OBBBA) in July 2025, Health Savings Accounts (HSAs) are seeing some of the most impactful updates in years.

While HRAs remain unchanged under the new law, HSAs are gaining new flexibility —offering expanded eligibility and enhanced coverage options that could reshape how employers structure their benefits in 2026 and beyond.

What Are HRAs?

HRAs are employer-funded arrangements that reimburse employees for qualified medical expenses and, in some cases, individual health insurance premiums. Two of the most common types are:

• Individual Coverage HRA (ICHRA): Available to employers of any size, this reimburses employees for individual market health insurance premiums and other eligible expenses.
• Qualified Small Employer HRA (QSEHRA): Limited to businesses with fewer than 50 full-time employees, this provides a fixed, tax-free monthly allowance to help cover medical costs or premiums.

HRAs give employers cost control and design flexibility while offering employees more choice in their healthcare options.

HRA & HSA Tax Advantages

• For Employers: Contributions to HRAs and HSAs are typically tax-deductible.
• For Employees: HRA reimbursements (when used correctly) and HSA contributions, earnings, and withdrawals for qualified expenses are all tax-free —making these tools highly efficient.

Why Employers Are Still Considering HRAs

Even without changes in the new legislation, HRAs remain a strong alternative to traditional group health insurance, thanks to:

• Flexible Plan Design: Tailored reimbursement structures
• Cost Predictability: Employers set contribution limits
• Employee Choice: Workers select coverage that fits their needs

What Did Change: Key HSA Updates for 2026

While many HRA-related proposals were ultimately excluded from the final bill, the OBBBA made several meaningful updates to HSAs, effective January 1, 2026:

1. Expanded HSA Eligibility

Employees enrolled in ACA Bronze-tier or catastrophic plans will now qualify to contribute to an HSA—broadening access beyond traditional high-deductible health plans (HDHPs).

2. Telehealth Permanence

The temporary allowance for first-dollar telehealth services has been made permanent. HDHPs can now offer telehealth before the deductible without disqualifying HSA contributions.

3. Direct Primary Care (DPC) Compatibility

HSAs can now reimburse up to $150/month for individuals or $300/month for families for Direct Primary Care memberships —a popular option for preventive and low-cost care.

What Was Not Included in the Final Bill

Some widely discussed proposals did not make it into the final version of OBBBA:

• No ICHRA integration with Section 125 cafeteria plans
• No new HRA-specific tax credits
• No dual-offering changes for ICHRA and group plans
• No income-based HSA caps or fitness reimbursements

These remain on the table for future legislation, but are not part of the 2026 landscape.

Employer Action Plan for 2026

To stay ahead of the curve, employers should:

• Review Benefits Strategy: Explore whether HSA-compatible plans align with workforce needs, especially given new ACA plan eligibility.
• Update Plan Documents: Make necessary adjustments for telehealth, DPC coverage, and new eligibility rules.
• Educate Employees: Prepare for open enrollment with clear materials outlining HSA advantages and new qualifying plans.
• Coordinate with Advisors: Work with brokers and benefits partners to implement compliant and competitive plans.

Final Thoughts

The One Big Beautiful Bill makes HSAs more versatile, especially for employees enrolled in ACA plans or seeking telehealth and DPC access. While HRAs did not receive direct updates, they remain a valuable option for employers seeking flexible, budget-conscious benefit strategies.

By taking steps now, businesses can position themselves to offer more flexible plan designs heading into 2026.