Savings Boost: IRS Raises HSA Contribution Limits for 2027
By
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:
Further Reading
Washington Paid Leave Premium Increases Jan. 1
On Jan. 1, 2027, Washington’s Paid Family & Medical Leave premium increases to 1.2%, from 1.13%. Employers will pay 29.3% of the paid leave premium; the employee share is 70.7%. Employers may cover some or all of employees’ share. Generally, employers with fewer than 50 employees don’t need to pay the employer share unless they […]
Year-End Fringe Benefits: Check Payroll’s Accounting Cutoff
With year-end approaching, payroll teams should review whether the IRS’s optional special accounting rule makes sense for certain taxable noncash fringe benefits. The rule lets employers treat benefits provided during November and December (or a shorter period within those months) as paid in the following year. For example, personal use of a company vehicle in […]
Handy Open Enrollment Jargon Cheat Sheet for You
Open enrollment can be a hectic time of year for HR pros and the employees you help. Add open enrollment jargon to the mix, and you can ensure confusion will flourish. Clarifying Open Enrollment Jargon So we’re equipping our readers — and your employees — with a handy jargon cheat sheet to get through benefits […]
Massachusetts Changes PFML Contribution Allocation for 2027
Massachusetts recently updated its paid family and medical leave contribution guidance after passing Chapter 101 of the Acts of 2026. The changes take effect Jan. 1, 2027. The law shifts employer contributions from medical leave to family leave to mitigate the impact of IRS guidance on PFML benefit taxation. Employers with 25 or more covered […]
Make a Bigger Impact with Your Benefits with the Right Choices | 2-Minute Video
Choosing benefits isn’t a check-the-box activity for employees anymore. Employees want — and need — benefits that fit their lives. Notice, we didn’t say they need more. They need the right benefits so they can use them and manage them to the fullest. What’s Up in This Episode: Right-Fit Benefits That’s why, in this episode […]
Why Employees Struggle With Open Enrollment and 6 Ways to Help
As open enrollment season looms, HR departments will want to prepare to help employees before it even starts. They’ll have questions, and you want to give them the information they need to make the best decisions about their benefits. Employees have confidence in you to answer questions and take care of them: Two-thirds of employees […]