Savings Boost: IRS Raises HSA Contribution Limits for 2027

The IRS has announced updated health savings account (HSA) contribution limits and high-deductible health plan (HDHP) parameters for 2027, reflecting standard inflation adjustments.

2027 HSA Contribution Limits

Employees will be able to contribute slightly more to their HSAs next year. Employer contributions remain included in the total annual limit.

The HSA contribution limits for 2027 are as follows:

• Self-only coverage: $4,500 (up from $4,400 in 2026)
• Family coverage: $9,000 (up from $8,750 in 2026), and
• Catch-up contributions (age 55+): $1,000 (unchanged; fixed under IRC §223(b)(3)).

Plan sponsors should update payroll systems and employee communication materials ahead of open enrollment to reflect these changes.

HDHP Minimum Deductibles and Out-of-Pocket Maximums (2027)

To maintain HSA eligibility, health plans must meet the following minimum deductible and maximum out-of-pocket thresholds for calendar year 2027:

Self-only coverage:

• Minimum deductible: $1,750, and
• Out-of-pocket max: $8,700.

Family coverage:

• Minimum deductible: $3,500, and
• Out-of-pocket max: $17,400.

These figures may influence plan design decisions heading into 2027 and could affect overall health benefits strategy.

The One Big Beautiful Bill Act updated HSA eligibility rules for employees enrolled in a Direct Primary Care Service Arrangement (DPCSA). Previously, DPCSA enrollment could disqualify an individual from contributing to an HSA. That restriction no longer applies effective Jan. 1, 2026, provided monthly DPCSA fees do not exceed $150 for an individual or $300 for an arrangement covering more than one person.

HR and benefits teams should update eligibility communications and review plan offerings to reflect the change.

Reminder: Triple Tax Advantage of HSAs

HSAs continue to offer unmatched tax efficiency, which can serve as a powerful employee benefit and financial planning tool:

• Pre-tax contributions: Lower taxable income
• Tax-free investment growth: Assets can grow without tax drag, and
• Tax-free qualified withdrawals: Funds used for eligible medical expenses are not taxed.

Looking for more HSA help? Our HR expert contributors Itamar Romanini and Becky Seefeldt have written several articles with valuable insight:

• Smart money moves: Maximizing the tax value of an HSA
• Top 10 things HSA participants need to know
• Happy surprises: 3 ways HSAs deliver unexpected benefits for employees
• Top 9 questions about HSAs answered
• Little-known HSA requirements: Receipts and recordkeeping