More Americans Can Contribute to an HSA Under Trump's OBBB. Are You Eligible?

The July 2025 One Big Beautiful Bill expanded HSA rules, increasing eligibility and flexibility: as of Jan. 1 this year, ACA marketplace Bronze and Catastrophic enrollees can contribute to HSAs, and direct primary care memberships are compatible with HSAs provided fees are below $150/month (individual) or $300/month (family), with HSA funds allowed to pay those fees. 2026 contribution limits are $4,400 for self-only coverage, $8,750 for family coverage, plus a $1,000 catch-up for those 55 and older; Medicare enrollees remain ineligible. These changes broaden the pool of potential HSA users and could modestly affect demand for HSA custodial services and primary-care subscription models.

Analysis

Market structure: Expanded HSA eligibility creates asymmetric winners — HSA custodians and administrators (e.g., HealthEquity HQY), retail brokers that offer HSA investment windows (SCHW), and direct-primary-care (DPC) providers (Oak Street OSH, Teladoc TDOC) gain recurring-fee and AUM tailwinds. If even 5–10M newly eligible Americans contribute a conservative $1,000/year, that implies $5–10B incremental annual flows into HSA custodians and associated mutual/ETF wrappers over 12–36 months, improving pricing power for custodians and forcing insurers to redesign product mix toward HDHP/ACA Bronze offers. Cross-asset impacts are modest: incremental retail AUM supports equity demand and fee revenue for financials, slight downward pressure on short-term consumption; bond and FX effects are secondary.

Risk assessment: Near-term risks include IRS implementation delays, state exchange compliance issues, or litigation that could restrict DPC fee treatment — low probability but high impact. Time horizons: immediate (days) negligible market moves; short-term (0–6 months) enrollment and guidance events matter; structural (12–36 months) is where AUM and recurring-fee revenue accrue. Hidden dependencies include employer plan design changes and indexing of the $150/$300 DPC fee caps; catalysts include 2026 open-enrollment statistics, Q2–Q4 2026 results from HQY, and IRS/DOJ guidance.

Trade implications: Direct plays favor 2–3% portfolio exposure to HQY (fee/AUM capture) and 1–2% to OSH/TDOC (DPC demand), opened on weak short-term reaction or ahead of open enrollment. Use 9–15 month calls or buy-call spreads on HQY to capture AUM acceleration while limiting premium — e.g., buy 12-month 25% OTM call spreads sized to 1–2% notional. Pair trade: long OSH, short HCA (hospital exposure) to capture outpatient shift; overweight Financials (custodians, SCHW) and Health Services, underweight hospital-discretionary names.

Contrarian angles: Consensus underestimates operational frictions — many state exchanges and small employers will delay integration, slowing flows into custodians; uptake may skew to higher-income enrollees first, so initial AUM growth could be concentrated and smaller than headline-eligible counts. Reaction is likely underdone for custodians and overdone for insurers that rely on fee-based PPO revenue — monitor quarterly net new account metrics, average HSA balance per account, and DPC enrollment trends for early signals.

Key Decisions for Investors

• Establish a 2–3% long position in HealthEquity (HQY) over the next 4–8 weeks; size with a stop-loss at 15% downside and target to trim at +20% or after 12 months if AUM/weekly net new accounts accelerate above $100M/month.
• Buy a 12-month call spread on HQY (e.g., buy 25% OTM, sell 40% OTM) sized to 1% portfolio risk to capture AUM-driven rerating while limiting premium decay; roll or realize by open enrollment 2026 data release.
• Initiate a 1–2% long position in Oak Street Health (OSH) and a symmetric short (1–2%) in HCA Healthcare (HCA) as a pair trade to capture outpatient/DPC share gains; monitor monthly DPC subscription disclosures and trim if OSH reports <10% QoQ DPC revenue growth.
• Add 1% positions in Centene (CNC) and Molina (MOH) to play ACA Bronze enrollment tailwinds, but cap combined exposure to 2% and set alert to reduce exposure if ACA margin guidance weakens by >150bps in any quarterly print.
• Monitor three triggers in the next 30–90 days before enlarging positions: (1) IRS/DOJ formal guidance on DPC fee treatment, (2) CMS/HealthCare.gov metrics on Bronze plan enrollments, (3) HQY monthly net new accounts and average HSA balance; increase allocations only if two of three show positive confirmation.