Your Lowest-Cost Obamacare Plan May Now Include a Tax Benefit. Here’s How to Take Advantage.

The cheapest plans on HealthCare.gov now come with a tax advantage, and the right move could still pay off this year.

For years, the lowest-priced plan on HealthCare.gov came with a hefty deductible and none of the tax advantages. That has changed.

As of Jan. 1, 2026, all bronze and catastrophic plans sold to individuals qualify as compatible with a health savings account, or HSA, according to the IRS.

In plain English: Choose one of those plans, and you can put money into an HSA, take a tax deduction for it, and use the funds for medical expenses without tax on the way in or the way out.

Open enrollment for 2027 coverage began Nov. 1. Many shoppers will choose a bronze plan because its premium is the lowest. Most, I suspect, have no idea they are passing up a tax break.

I have been a CPA since 1981. Here are the six things I would want a friend to know before picking a plan this fall.

1. The lowest-priced plans now qualify for HSAs

Before 2026, many bronze plans did not qualify for an HSA because they did not meet the IRS definition of a high-deductible health plan. The 2025 tax law changed that by making bronze and catastrophic plans eligible for months after Dec. 31, 2025.

The IRS explained the rules in Notice 2026-5 and a December 2025 news release. One helpful detail: The plan does not have to be purchased through the exchange. A bronze or catastrophic plan bought directly from an insurer also qualifies.

On HealthCare.gov, you do not have to guess. The site’s HSA page links to an “Eligible for an HSA” filter that shows the plans in your area that qualify.

CMS says eligible HealthCare.gov shoppers will have an average of 35 HSA-eligible plans to choose from for 2027.

Catastrophic plans are available only to a narrower group. They are generally limited to people under 30 or those who qualify for a hardship or affordability exemption. For most early retirees, bronze is the plan that matters.

2. If you had a bronze plan this year, you may still be able to claim the deduction

One detail is easy to overlook: The change started in January 2026. So if you have been enrolled in a bronze plan all year, you may already be eligible to contribute to an HSA for 2026.

The IRS allows contributions for a tax year up to the unextended filing deadline. For the 2026 tax year, that deadline is April 15, 2027.

The 2026 contribution limit is $4,400 for self-only coverage and $8,750 for family coverage, with an additional $1,000 if you are 55 or older.

That means a 58-year-old with self-only bronze coverage for the full year could contribute as much as $5,400 for 2026 and deduct it on a return filed next spring.

The fine print matters. Eligibility is tested month by month: you must have qualifying coverage on the first day of the month, no other disqualifying health coverage, and no one else able to claim you as a dependent. If any of that is uncertain, resolve it before you make a contribution.

3. Do the math if you are 55 or older

For 2027, the IRS increased the limits to $4,500 for self-only coverage and $9,000 for family coverage. The extra $1,000 catch-up contribution for people age 55 and older remains on top of that.

To make it concrete: suppose you are 58, single, retired early, and enrolled in a bronze plan. You contribute $5,500.

At a 12% federal tax rate, that reduces federal income tax by about $660. At 22%, the savings is about $1,210. A couple in the 22% bracket that maxes out the $9,000 family limit would save about $1,980, before any catch-up contributions.

And you do not need to itemize to benefit. The HSA deduction is an adjustment to income on Schedule 1, so it lowers adjusted gross income directly.

That matters more than it may seem for early retirees. Marketplace premium help is based on modified adjusted gross income, which starts with AGI. Lowering AGI may also reduce the income used to determine your subsidy.

If you are close to a subsidy threshold, check the numbers before you file.

If you are managing retirement withdrawals, subsidies, and HSA contributions at the same time, a second set of eyes can help. Here is a place to find a financial advisor who can sort it out.

A quick reminder: when it comes to money, the best day to get smart was 20 years ago. The second-best is today. Sign up for the free Money Talks Newsletter and start now. It takes 10 seconds, costs nothing, and could change your retirement.

4. Do not let the tax break push you into a deductible you cannot handle

To be clear, an HSA does not make a bronze plan cheaper if you get sick. It only lets you pay medical bills with pretax dollars.

According to HealthCare.gov, a bronze plan is designed to cover about 60% of covered costs, leaving you responsible for the other 40%. Deductibles are generally high. For 2027, federal rules allow marketplace plans to cap out-of-pocket costs as high as $12,000 for one person and $24,000 for a family.

Notice the difference? The usual HSA-plan rules for 2027 cap out-of-pocket costs at $8,700 for self-only coverage. Bronze plans were brought into HSA eligibility without having to meet that standard.

So in a bad year, a bronze plan can leave you responsible for as much as $3,300 more than a traditional HSA-qualified plan could.

Go back to the example above. That $1,210 tax savings only covers about one-tenth of a $12,000 worst-case year. It is a helpful cushion, not a safety net.

Be honest about your health. If you take expensive medications or expect surgery, a silver plan may cost less overall even with the higher premium. Compare both.

Many people have switched from silver to bronze to avoid higher premiums, as discussed in this look at the deductible tradeoff.

5. Know what the account can pay for — and what it cannot

This is where people often get tripped up. In general, you cannot use HSA money to pay health insurance premiums, including your marketplace premium.

The IRS lists a few exceptions: long-term care insurance, COBRA continuation coverage, coverage while receiving unemployment benefits, and Medicare plus some other coverage once you are 65. Medigap policies do not qualify.

If you use HSA money for something that is not a qualified medical expense, you will owe income tax plus a 20% additional tax. That extra 20% goes away once you turn 65, become disabled, or die.

Two newer benefits are worth noting. Beginning in 2026, people in certain direct primary care arrangements — where you pay a doctor’s office a flat monthly fee — can still contribute to an HSA and use it to pay those fees tax-free.

The catch is that the fees cannot exceed $150 a month, or $300 if the arrangement covers more than one person.

The other benefit is that plans can now cover telehealth before you meet the deductible without affecting HSA eligibility. Congress made that permanent.

One more timing trap: Expenses incurred before you open the HSA are not eligible. So if you switch to bronze in January, open the account early rather than waiting for the first large bill. The plan and the account are separate things.

6. Medicare shuts the door on new contributions

Here is the end of the road: once Medicare coverage starts, the IRS says your HSA contribution limit drops to zero for each month you are enrolled.

If you work past 65, Medicare’s website warns that you and your employer should stop HSA contributions six months before retiring or claiming Social Security to avoid a tax penalty.

Thinking about easing into retirement with part-time work instead? These are the moves that can determine whether semi-retirement is worth it.

The good news is that the money does not disappear. Unused balances carry over year after year. After 65, you can use the account to pay Medicare premiums, and withdrawals for nonmedical expenses no longer face the 20% penalty, though they are still taxable.

The bottom line

The cheapest marketplace plans just gained one of the best tax shelters in the code: deductible on the way in, tax-free growth, and tax-free withdrawals for medical bills. For a healthy early retiree, that is a strong reason to take another look at bronze.

Still, the tax break is the side dish, not the main course. Choose the plan based on what you can afford if something goes wrong, then use the HSA to soften the cost.

The deadline is tight. On HealthCare.gov, sign up or switch by Dec. 15 to have coverage begin Jan. 1. Open enrollment closes Jan. 15, with coverage starting Feb. 1. If your state uses its own exchange, check its dates.

If your insurer is leaving your area, check whether yours is among the 11 that are exiting before you do anything else.