Only Minor Changes to HSA Accounts Following The Passing of the Big Beautiful Tax Bill
The Big Beautiful Tax Bill made waves with several high-profile tax changes, but surprisingly, very few changes were made to Health Savings Accounts (HSAs). Below we outline what made it into the final bill, what got removed, and what retirees—especially those on Medicare—need to know going forward.
By Michael Ruger, CFP®
Partner and Chief Investment Officer at Greenbush Financial Group
The Big Beautiful Tax Bill made waves with several high-profile tax changes, but surprisingly, very few changes were made to Health Savings Accounts (HSAs).
The original House version of the bill proposed several generous HSA reforms, but many of those provisions did not survive final negotiations in the Senate. What passed into law is far more limited in scope—but still important for HSA participants and high-deductible health plan (HDHP) users to understand.
Below we outline what made it into the final bill, what got removed, and what retirees—especially those on Medicare—need to know going forward.
What Changed for HSAs (Final Bill Provisions)
While many headline HSA changes were removed, a few modest but helpful updates did make it into the final version of the Big Beautiful Tax Bill. Starting in 2026, these changes will apply:
1. Modest Increase in Contribution Limits
HSA contribution limits will still increase, though not as dramatically as proposed in the original House bill. The finalized increases will be indexed annually, but will remain tethered to the HDHP inflation formula.
Projected (not confirmed) 2026 limits:
These are normal annual adjustments, not the doubling of limits that was originally proposed in the House version.
2. Expanded Eligible Expenses (Still Intact)
The final bill does include modest expansion of what HSA funds can be used for without penalty:
Fitness and wellness programs (with physician sign-off)
Some home health monitoring equipment
Nutritional counseling and weight loss programs (medically prescribed)
Telehealth and other remote care services before meeting the deductible (effective 2025)
While not a massive overhaul, this creates more flexibility for proactive health management and out-of-pocket wellness spending.
What Got Removed From the Final Bill
The Senate stripped out several big-ticket HSA reforms that many taxpayers were hoping for. These proposed changes did not make it into law:
No HSA Contributions for Medicare Enrollees
One of the biggest disappointments was the Senate’s removal of the provision that would have allowed retirees on Medicare Part A to continue contributing to HSAs.
As it stands under current law—and unchanged by the new bill—if you are enrolled in any part of Medicare, including just Part A (hospital insurance), you are prohibited from making HSA contributions, even if you're still working and covered by an employer’s HDHP.
For more information, read our article:
“The HSA 6-Month Rule: What Happens When You Enroll In Medicare at Age 65”
No Doubling of Contribution Limits
The House bill proposed doubling the annual HSA contribution limits but the Senate eliminated this enhancement during reconciliation. For now, standard annual inflation adjustments will continue to dictate contribution caps.
No Catch-Up Coordination for Married Couples
Another House provision that would have allowed spousal catch-up contributions into a single HSA was removed. Currently, each spouse must open their own HSA to make the age 55+ catch-up contribution. That rule remains unchanged.
Planning Implications for Retirees on Medicare
The final bill leaves the existing HSA-Medicare rule intact, which means:
If you’re age 65 or older and enrolled in Medicare, even just Part A, you cannot contribute to an HSA
You can still spend previously accumulated HSA funds tax-free on qualified medical expenses, including:
Medicare premiums (Parts B, D, and Medicare Advantage)
Long-term care insurance premiums (subject to limits)
Dental, vision, hearing, and copays
This reinforces the strategy of front-loading HSA contributions before Medicare enrollment, while you’re still eligible.
Final Thoughts
The final version of the Big Beautiful Tax Bill made far fewer changes to HSAs than originally proposed. While modest improvements to eligible expenses were included, the most exciting enhancements—especially for higher-income workers and retirees—were removed.
That said, HSAs remain one of the most tax-advantaged accounts available:
Tax-deductible contributions
Tax-free growth
Tax-free withdrawals for qualified expenses
For now, the existing HSA rules remain in place, and careful planning before Medicare enrollment is still essential for maximizing long-term tax benefits.
About Michael……...
Hi, I’m Michael Ruger. I’m the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.
Frequently Asked Questions (FAQs):
What HSA changes were included in the Big Beautiful Tax Bill?
The final bill made only modest updates to Health Savings Accounts (HSAs), including a small inflation-based increase in contribution limits beginning in 2026 and expanded eligibility for certain health-related expenses such as fitness programs, home health monitoring devices, and nutritional counseling.
Did the Big Beautiful Tax Bill double HSA contribution limits?
No. The Senate removed the House’s proposed doubling of annual HSA contribution limits. Instead, contribution limits will continue to rise modestly based on standard inflation adjustments tied to high-deductible health plan (HDHP) thresholds.
Can retirees on Medicare still contribute to an HSA?
No. The new law did not change the rule preventing Medicare enrollees—including those enrolled only in Part A—from contributing to an HSA. Once you enroll in Medicare, you can no longer make new contributions, though you can continue using existing funds for qualified medical expenses.
What expenses can HSAs now cover under the new law?
Beginning in 2026, HSAs can be used for a slightly broader range of qualified expenses, including physician-approved fitness and wellness programs, telehealth services before meeting the deductible, certain home monitoring devices, and medically prescribed nutritional counseling or weight loss programs.
What HSA reforms were removed from the final bill?
The following proposals from the House version were cut by the Senate:
Allowing Medicare enrollees to continue contributing to HSAs
Doubling annual HSA contribution limits
Allowing married couples to make both catch-up contributions into one HSA
What should retirees know about HSAs and Medicare under current law?
If you are 65 or older and enrolled in any part of Medicare, you cannot contribute new funds to an HSA. However, you may still withdraw from your HSA tax-free to pay for qualified medical expenses, including Medicare premiums, long-term care insurance (within IRS limits), and out-of-pocket healthcare costs.
Are HSAs still valuable after the Big Beautiful Tax Bill?
Yes. Even with limited reform, HSAs remain a “triple-tax-advantaged” account: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified expenses are tax-free. Pre-retirees should maximize contributions while eligible to take full advantage of these benefits.
