IRS Unveils 2027 HSA, HDHP Limits

The long-awaited health savings account (HSA) and high-deductible health plan (HDHP) figures for 2027 have been announced. Employers have been waiting, as the announcement usually comes in early May.

The annual limit on HSA contributions for self-only coverage in 2027 will be $4,500, a 2.3% increase from the $4,400 limit in 2026, the IRS announced May 29. For family coverage, the HSA contribution limit will jump to $9,000 next year, up 2.9% from $8,750 in 2026.

Meanwhile, for 2027, an HDHP must have a deductible of at least $1,750 for self-only coverage, up from $1,700 in 2026, or $3,500 for family coverage, up from $3,400 in 2026. Annual out-of-pocket expense maximums (deductibles, co-payments, and other amounts, but not premiums) cannot exceed $8,700 for self-only coverage in 2027, up from $8,500 in 2026, or $17,400 for family coverage, up from $17,000 in 2026. 

The IRS also announced that the excepted-benefit health reimbursement arrangement limit will be $2,250, up from $2,200 in 2026.

All limits will take effect Jan. 1, 2027.

Many industry experts tout HSAs as a smart way for employees to save for medical expenses, even in retirement, citing their triple tax benefits: Contributions are made pretax, the money in the accounts grows tax-free, and withdrawals for qualified medical expenses are tax-free.

Employees are increasingly turning to HSAs and putting away more money in their HSAs as healthcare costs continue to rise. Data from HSA provider Lively found that the average account balance for the company’s clients was $5,457 in 2025, up from an average of $4,923 the previous year. That’s a year-over-year increase of 11%.

Roughly 61% of employers offer an HSA, according to SHRM data.

Still, industry experts say that employers offering HSAs need to improve education on these benefits, and explain to employees how to best take advantage of these accounts. Although employees are putting more money into their accounts, employees aren’t using them to their full advantage. The vast majority of employees with an HSA (67%) said they used the accounts for out-of-pocket expenses from the past year or near term, according to a report from the Employee Benefit Research Institute (EBRI), a Washington, D.C.-based nonprofit organization. Only 35% reported saving in their HSA for health care costs in retirement, and 28% said they had invested their account funds.

Article: Employees Are Leaning on HSAs for Short-Term Expenses

“The biggest opportunity for HSAs this year is closing the education gap at scale,” said Shobin Uralil, cofounder and chief operating officer of Lively in New York City.

Employers should “proactively educate employees on how HSAs work, from contributions and investments to long-term savings,” Uralil said. 

HSA annual limits are released every spring by the IRS — ahead of other limits such as flexible spending accounts and 401(k) contributions — giving employers and HSA administrators plenty of time to adjust. Employers often promote HSAs and encourage employees to boost their contributions during open enrollment, though it would be a good idea for HR and benefits leaders to start that conversation now.