Expanded HSA Rules: Growth Potential vs. Participation Risks

The Treasury and IRS broadened Health Savings Account (HSA) eligibility under the One, Big, Beautiful Bill for 2025-2026, aiming to make these accounts more accessible. Three key changes stand out. First, individuals can now use pre-tax HSA funds for telehealth services even before meeting their annual deductibles, removing a previous barrier. Second, enrollment in bronze or catastrophic tier marketplace health plans – including those purchased outside government exchanges – now qualifies individuals to contribute to HSAs, significantly expanding the pool of potential users. Third, payments made directly to primary care providers under direct primary care arrangements are now considered qualified medical expenses covered by the HSA. These shifts treat non-traditional health plans as HSA-eligible and allow tax-free payments for direct primary care fees. According to guidance.

The changes also adjusted contribution limits. For 2025, individuals with self-only coverage can contribute up to $4,300, while family coverage allows $8,550, with an additional $1,000 catch-up contribution permitted for those aged 55 and older. These limits rise slightly for 2026 to $4,400 for self-only and $8,750 for family coverage. HSAs retain their core advantages: contributions are made with pre-tax dollars, earnings grow tax-free, and withdrawals for qualified medical expenses are also tax-free. Unused funds roll over year after year, building long-term savings. According to Fidelity, these limits are set to reflect current economic conditions.

While these expansions are designed to boost HSA participation by lowering barriers for those on lower-premium plans and offering more flexibility for medical spending, significant regulatory ambiguity remains. The Treasury has invited public comments on the implementation details through March 2026, indicating that final guidance and operational rules are still forthcoming. This extended comment period creates uncertainty for both consumers and administrators regarding how exactly these new eligibility categories will be verified and administered. Consequently, while the policy shift offers substantial potential upside for HSA usage, the lack of finalized procedural rules represents a tangible risk that could delay widespread adoption or create compliance challenges.

Participation Gaps and Cash Flow Constraints

Health Savings Accounts (HSAs) have expanded rapidly, now holding $147 billion across 39 million accounts-a 19% annual increase. Yet only 9% of holders actively invest these funds, with 91% parking money in low-yield savings according to NAPA. This stagnation contrasts sharply with the $64 billion in investment assets, which grew 38% in 2024.

Employer contributions average $927 annually-just 24% of total deposits-while employees contribute $2,341 on average. This asymmetry leaves HSAs vulnerable to corporate cost-cutting if economic conditions worsen.

Regulatory ambiguity persists around telehealth eligibility. New rules allow tax-free HSA contributions for telehealth services before meeting deductibles, but unclear implementation timelines and ongoing public comment periods create friction for adoption.

While projections suggest $199 billion in assets by 2027, cash flow sustainability remains questionable unless participation in investment options accelerates. The current 9% investment rate fails to capitalize on HSAs' long-term growth potential, leaving most balances exposed to inflation eroding purchasing power.

Growth Risks and Downside Scenarios

Dell's AI server push faces significant headwinds from broader economic and policy shifts impacting corporate cash reserves. The $100 billion annual gap between eligible Americans and actual HSA account holders represents a massive pool of untapped capital that could otherwise fund technology investments like Dell's infrastructure. While new rules theoretically expand HSA eligibility to cover more Americans purchasing lower-cost bronze and catastrophic insurance plans according to Healthcare.gov, participation remains low. Even among existing account holders, a staggering 91% of funds sit idle in low-yield savings accounts, failing to generate meaningful returns or support corporate growth initiatives. This cash hoarding behavior directly contradicts Dell's need for robust capital expenditure from enterprise clients.

The 25-30% effective tax savings on healthcare costs enabled by HSAs cedes valuable revenue to the Treasury instead of circulating back into the economy for technology upgrades. Although the One Big Beautiful Bill (OBBB) further broadens HSA eligibility through 2025-2026, allowing contributions for telehealth and direct primary care fees according to IRS guidance, these policy changes create compliance headaches. Mandating Medicaid conversion to maintain HSA eligibility could force states into complex administrative burdens and potentially unequal funding distributions, undermining the policy's intended economic stimulus. Dell's AI server business, while benefiting from corporate spending on infrastructure, remains exposed to these macroeconomic frictions. Continued regulatory uncertainty around HSA rules and Medicaid conversions creates a shadow over enterprise IT budgets, particularly if compliance costs or healthcare inflation erodes corporate liquidity. Investors should monitor policy developments closely, as unexpected regulatory shifts could dampen Dell's growth trajectory despite strong near-term AI demand.

Cash Flow Implications and Catalysts

HSA assets have surged to $147 billion in 2024, fueled by 19% annual growth and 39 million active accounts. Yet only 9% of holders currently invest funds, with investment assets climbing 38% to $64 billion despite limited participation according to Devenir. Devenir projects $199 billion in assets by 2027-and 45 million accounts-but this hinges on lifting participation to 15%, a 7-percentage-point gap from today according to NAPA. The execution risk is tangible: scaling participation requires overcoming inertia, financial literacy gaps, and employer inertia.

The 2026 phase-in of expanded HSA eligibility under the OBBB gives employers time to adapt but delays meaningful cash flow benefits until after 2025 according to IRS guidance. Broader access-telehealth pre-deductible, bronze plans, direct primary care-creates long-term tailwinds, but near-term liquidity depends on how quickly employers translate regulatory clarity into action.

Key catalysts include IRS guidance clarifying plan eligibility and employer education initiatives to highlight HSA advantages. Until participation accelerates, however, growth projections remain hypothetical. The gap between today's 9% investing rate and tomorrow's 15% target will define whether $199 billion becomes reality or remains aspirational.