IRS Releases 2027 Contribution Limits for HSA, HDHP Benefits

The U.S. Internal Revenue Service (IRS) on Friday, May 29, unveiled the inflation-adjusted limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs) for the 2027 calendar year. The release, geared to help employers with their benefits planning, features across-the-board increases for contribution caps, deductibles and out-of-pocket maximums.

HSA Contribution Limits

The IRS allowed a modest increase to what plan participants can fund on a pre-tax basis to their HSAs (see below).

* = for HSA-eligible individuals aged 55 or older

HDHP Minimum Deductibles

For an HDHP-compatible plan to be considered “qualifying,” the agency slightly updated the minimum annual deductible requirements (see below).

HDHP Out-of-Pocket Maximums

Maximum annual out-of-pocket (OOP) expenses — including deductibles and copayments but excluding premiums — were increased at a similar rate for HDHPs (see below).

Navigating Non-Embedded Deductibles

Under 2027 HDHP rules, individual deductibles can’t be embedded unless a plan has an individual deductible of at least $3,500 (the amount of the family deductible).

When an annual deductible is non-embedded (aggregate), no benefits are provided for any single family member’s qualifying expenses until the family, as a whole, has incurred enough qualifying expenses to meet the minimum family deductible.

Coordination with ACA Out-of-Pocket Limits

HDHPs have a different annual out-of-pocket limit than the annual limit established under the Affordable Care Act (ACA) (see below for year-over-year details). To maintain compliance, all employers offering non-grandfathered group health plans must use the lower of the two HDHP limits (the ACA limit vs. the HDHP limit). This rule applies regardless of company size or whether the plan is fully insured, self-insured or level-funded.

Impact on Non-Calendar Year Plans

Non-calendar-year HDHPs should adopt the 2027 deductible and OOP limits with the start of their new plan year. For instance, an HDHP with a July 1 plan year is subject to the $1,750/$3,500 deductible and $8,700/$17,400 OOP limit starting July 1, 2027, and this continues through June 30, 2028.

HSA contribution limits, though, still apply to the standard calendar year, even for non-calendar-year plans.

Editor’s Note: Additional Content

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