Savings Boost: IRS Raises HSA Contribution Limits for 2025

Employees will be able to contribute a bit more money to their health savings accounts (HSAs) next year, the IRS recently announced.

Each year, the Service makes inflation-based adjustments to HSA contribution limits. Due to ongoing inflation, the limits will increase slightly in 2025 – a far cry from the record-breaking 7% jumps in 2024.

HSA contribution limits

Here are the HSA contribution limits for 2025. Importantly, any employer contributions count toward the contribution limit.

• Self-only coverage: Individuals with self-only coverage will be able to contribute $4,300 in 2025, a slight bump from the $4,150 limit set for the 2024 calendar year.

• Family coverage: Employees with family coverage will be able to contribute $8,550 in 2025, up from $8,300 in 2024.

• Catch-up contributions: Workers aged 55 and older are eligible to make catch-up contributions. The IRS did not announce a change in the catch-up contribution limit, which currently stands at $1,000.

HDHP annual deductibles

The Service also announced annual deductibles for high-deductible health plans (HDHPs) in 2025.

For self-coverage only, annual deductibles must be at least $1,650 and cannot exceed $8,300.

For family coverage, annual deductibles must be at least $3,300 and cannot exceed $16,600.

Triple tax benefits of HSAs

Many employees have probably heard that HSAs offer triple tax benefits, but do they understand what that really means?

Under an HSA, all of the following are tax-free:

1. Contributions: The money employees contribute is a pre-tax deduction, meaning the money is taken out of their paycheck before taxes are withheld from their paycheck.
2. Investment growth: HSA funds can be invested, and that money grows tax-free.
3. Eligible distributions: Money used to pay for eligible medical expenses can be withdrawn tax-free.

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