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The IRS has released 2027 contribution limits for health savings accounts, or HSAs, that offer triple tax benefits to investors.
Beginning in 2027, the new HSA contribution limit will be $4,500 for self-only plans, up from $4,400 in 2026, based on the latest inflation adjustments.
The HSA limit for family coverage will also increase in 2027. That cap will jump to $9,000, up from $8,750 in 2026, according to an IRS announcement released Friday.
HSAs offer three tax advantages: Contributions are tax-deductible, funds grow tax-free and you pay no taxes on withdrawals for qualified medical expenses.
But in order to make contributions, you must have the most suitable health insurance plan. About 31% of companies with an employee health service offered HSA-eligible health plans with high deductibles by 2025, according to KFF, a health policy research group.
Many Americans also purchased these plans through the Affordable Care Act’s health insurance marketplace.
More than 59 million Americans had an HSA as of December 31, 2024, according to research released in July from Devenir, a company that provides HSA investment solutions and research, and the American Bankers Association’s Health Savings Account Council. The survey responded to the top 20 HSA providers.
Two-thirds of employers have offered options to invest in HSA contributions by 2024, according to the Plan Sponsor Council of America’s 2025 HSA survey released in September, which surveyed nearly 600 American employers. But only 20% of HSA participants invested their assets in 2024, down from 18% in 2023.
“The reality is that most people need to get their money for current expenses,” Hattie Greenan, director of research and communications for the Plan Sponsor Council of America, previously told CNBC.
Republicans are focused on expanding the HSA
Congressional Republicans have focused heavily on HSAs amid rising health care costs.
President Donald Trump’s “great big bill” expanded access to HSAs by making many health plans in the marketplace eligible for HSAs, among other changes.
Trump’s law did not extend the enhanced subsidies for health insurance in the marketplaces that lower the cost of premiums. The massive pandemic-era tax credit expires after 2025, leaving millions of Americans uninsured.
Senate Republicans in December used the concept of prepaid HSAs to partially offset the cost of expiring HSA funding. But some policy experts have criticized the proposals to expand the HSA.
“HSAs provide a huge tax break for high-income earners who can contribute to the account and leave the money there to accumulate tax-free investments over time,” Nicole Rapfogel, senior policy analyst for the Center on Budget and Policy Priorities, wrote in a February blog post.
Meanwhile, affordability, including the cost of health care, has become a key issue as the November midterm elections approach and Republicans fight to retain minority officials in the House and Senate.
