Health Savings Accounts (HSAs) have long been one of the most powerful—but underused—tools for building long-term, tax-efficient wealth.
HSAs offer unmatched flexibility—both as a healthcare savings tool and a long-term financial planning strategy. Not only do they provide a triple tax advantage (tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses), but they also allow for delayed reimbursements. That means HSA owners can pay out-of-pocket today and choose to reimburse themselves years later—as long as they keep proper documentation of the original medical expense. This makes HSAs a powerful option for building a tax-free rainy-day fund.
Beyond healthcare, HSAs can double as a supplemental retirement account. Starting at age 65, funds can be withdrawn for nonmedical expenses without penalty—just like traditional IRA withdrawals—though income tax will apply.
Additionally, children under age 26 who are no longer tax dependents but are still covered under a parent’s HSA-eligible family health plan may open and fund their own HSA—even if the contributions come from a parent or other family member. This opens the door to early tax-advantaged saving for the next generation.
Under the changes introduced in the One Big Beautiful Bill Act (OBBBA), HSAs are set to become more flexible starting next year—creating new planning opportunities to consider. But there’s a catch—especially for professionals nearing retirement age.
Let’s walk through what’s changing, what’s not, and how you can make smart moves in 2025 to take full advantage of what’s coming in 2026.
What Didn’t Make It Into the Final Law: HSA Relief for Working Seniors
One of the most anticipated changes—a fix that would have allowed working seniors enrolled in Medicare Part A to continue contributing to an HSA—was dropped from the final version of the bill.
That means the current rule still stands:
👉 If you’re enrolled in any part of Medicare, you can’t contribute to an HSA—even if you’re still working and covered under a qualifying plan.
⚠️ Reminder: Once you file for Social Security, you are automatically enrolled in Medicare Part A—and retroactively disqualified from making HSA contributions (up to six months back). That can result in tax penalties if you're not careful.
What Did Change: Expanded HSA Flexibility Starting in 2026
Despite the Medicare setback, the new law brings the biggest expansion of HSA benefits in years. Beginning in 2026:
Higher Contribution Limits Based on Income
Individuals earning ≤ $75,000: $8,600
Married couples earning ≤ $150,000: $17,100
(Current 2025 limits are $4,300 and $8,550)
More Plan Types Will Be Eligible
A major change under the One Big Beautiful Bill would expand HSA eligibility to more Affordable Care Act (ACA) plans. Currently, many individual ACA plans—particularly Bronze and Catastrophic options—don’t qualify as high-deductible health plans (HDHPs) under existing HSA rules. The new proposal would fix that by designating these plans as HSA-eligible, opening the door for millions of Americans to access the triple tax benefits of HSAs. This change could be especially impactful for early retirees under age 65 who rely on ACA plans before transitioning to Medicare, as well as for younger adults under 30 who opt for Catastrophic coverage and want to start building a tax-advantaged healthcare fund early.
New Eligible Expenses
Gym memberships and fitness programs (up to $500 individual / $1,000 family)
Direct primary care memberships (up to $150 individual / $300 family annually)
Spousal Catch-Up Contributions to a Single HSA
Under current law, if both spouses are 55 or older and eligible, they must each contribute their individual $1,000 catch-up to separate HSAs.OBBB’s change (Section 110209) allows both spouses to make their $1,000 catch-up contributions into the same HSA account, provided they’re both HSA-eligible and covered under a family High-Deductible Health Plan (HDHP). This streamlines account management—only one HSA to track, invest, and administer for the couple.
Another notable change is that one spouse can now contribute to an HSA even if the other is using an FSA. Additionally, beginning in 2026, employers may permit the rollover of unused FSA or HRA balances into an HSA—up to the FSA limit of ($3,300 in 2025).
Reimbursement of medical expenses incurred before opening an HSA.
The new rule includes a provision (Sec. 110211) that allows HSA owners to reimburse medical expenses incurred up to 60 days before the account’s establishment—so long as the HSA is opened within that timeframe.
What You Can Do in 2025 to Prepare
Even though the new rules take effect in 2026, this is the year to plan ahead. Here are a few strategies worth exploring:
- Maximize 2025 HSA Contributions - if you’re still eligible under current law, max out your HSA—and consider making catch-up contributions if you're 55 or older.
- Track Eligible Expenses - start saving receipts for gym memberships, fitness classes, and direct primary care. These could be reimbursed from your HSA starting in 2026.
- Review Income Thresholds - if your income is near $75K (individual) or $150K (married), there may be opportunities to qualify for higher 2026 limits. Think about income timing, Roth conversions, or other strategies to manage your AGI.
- Time Your Social Security Filing Carefully - if you're still working and want to keep contributing to your HSA, delay filing for Social Security. Remember—Medicare Part A enrollment is automatic and retroactive when you claim.
- Coordinate Benefits with Your Spouse - new rules will make coordination easier, but not until 2026. For now, plan carefully to avoid losing eligibility due to a spousal FSA.
Final Word: The HSA Still Belongs in Your Planning Toolkit
Even without the fix for working seniors, HSAs are poised to become more valuable than ever.
If you’re in your early 60s and still working—or helping a parent or spouse navigate their coverage choices—this is an opportunity to optimize not just for this year, but for your entire retirement horizon. HSAs can act as a tax-free healthcare fund, a bridge to retirement, or even a backdoor legacy vehicle when planned well.
Want help getting this right?
I specialize in working with professionals and caregivers navigating transitions—retirement, benefits, healthcare decisions, and everything in between.
Let’s build a plan that’s rooted in clarity, care, and strategy. Schedule a free consultation with Sunflower Financial Planning today.
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