TAX TIPS (and other stuff)
By Kelly J. Bullis, CPA
2026-May 16th
One of the better ideas that Congress actually made into tax law many years ago, was the Health Savings Account (HSA for short). It basically allows you to deduct much of your normal medical expenses that are limited out when you use actual Itemized Deductions. If you take the Standard Deduction (most folks do these days), then getting to deduct your medical expenses over and above the Standard Deduction is a sweet deal!
How it actually works is, contributions are tax-deductible, income growth is tax-free, and qualified medical related withdrawals are tax-free.
Qualified medical related withdrawals include, normal medical bills from doctors and hospitals, but also include Family Planning (birth control pills, fertility treatments, and pregnancy tests); Health-care related travel (going to and from surgery and other necessary medical treatments, including hotel); Vision (new glasses, contact-lens, and laser eye surgery); Dental (cleaning, and braces included); Over-the counter drugs (pain relief, allergy meds, sunscreens, etc.); Other stuff (drug-addiction and stop smoking programs, chiropractors, weight loss programs, insulin, acupuncture, children learning disability special education, etc.)
Up to July of 2025, the only way to qualify for opening and using an HSA was to have a high deductive medical insurance plan (HDHP) meeting certain standards. No ACA type plans were qualified.
In the One Big Beautiful Bill Act (OBBBA for short), passed last July 4th 2025, it expanded eligible medical insurance plans to include ACA bronze or catastrophic plans or who participate in direct primary care arrangements. These changes come into effect starting 2026.
Regarding the ACA (Obamacare Healthcare Exchange) bronze and catastrophic plans that now qualify, they are treated as HDHP (high deductible) compatible for HSA purposes, even if they do not meet the traditional minimum deductible and maximum out-of-pocket requirements. Folks who are enrolled in these lower-premium plans (common among younger, healthier folks) can now contribute to an HSA. For 2026, contribution limits are $4,400 for self-only coverage and $8,750 for family coverage, with a $1,000 catchup for folks 55 years old and older.
Folks who use a direct primary care arrangement (DPC) can now contribute to an HSA without disqualifying themselves, provided the monthly DPC fee does not exceed $150 per individual ($300 per family) HSA funds may also be used tax-free to pay those DPC fees. FYI, DPC arrangements are also sometimes known as “Concierge Doctors.”
So, there you have it. President Trump wanted to expand the use of HSA accounts to more folks, and the OBBBA has accomplished that.
Have you heard? Psalms 121:2 says, “My help comes from Yahweh, who made heaven and earth.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. As well as on our website at BullisAndCo.com. You can also find us on LinkedIn and Facebook.
