IRS Announces New Health Savings Account Limits for 2027:
The IRS has announced higher Health Savings Account, or HSA, limits for 2027.
For 2027, individuals with self-only coverage may contribute up to $4,500 to an HSA. Families with qualifying family coverage may contribute up to $9,000.
To contribute to an HSA, you must be covered by a qualifying high-deductible health plan, also known as an HDHP. For 2027, an HDHP must have a deductible of at least $1,750 for self-only coverage or $3,500 for family coverage.
The IRS also increased the maximum out-of-pocket limits for HDHPs. For 2027, out-of-pocket expenses cannot exceed $8,700 for self-only coverage or $17,400 for family coverage. These limits include deductibles, copayments, and other out-of-pocket costs, but they do not include insurance premiums.
HSAs offer important tax benefits. Contributions may be deductible, the money in the account can grow tax-free, and withdrawals are tax-free when used for qualified medical expenses.
Individuals age 55 and older may still make an additional $1,000 catch-up contribution. This amount remains unchanged.
The IRS also announced that the maximum amount available under an excepted-benefit Health Reimbursement Arrangement, or HRA, will increase to $2,250 for plan years beginning in 2027.
In addition, beginning in 2027, certain direct primary care service arrangements may not prevent an otherwise eligible individual from contributing to an HSA, as long as the monthly fees are within the allowed limits. For 2027, those limits are $150 per month for individual coverage or $300 per month when the arrangement covers more than one person.
HSAs can be a helpful way to save for medical expenses while receiving tax advantages. However, eligibility rules and contribution limits should be reviewed carefully before making contributions.
Proper planning can help maximize the tax advantages available through an HSA. If you would like assistance reviewing eligibility, contribution strategies, or overall tax planning opportunities, please reach out to our team. We are here and happy to help.
