If your organization offers a High-Deductible Health Plan (HDHP) paired with a Health Savings Account (HSA), it’s time to start planning for 2027.
The IRS has released the inflation-adjusted contribution and plan limits for Health Savings Accounts (HSAs), High-Deductible Health Plans (HDHPs), and Excepted Benefit Health Reimbursement Arrangements (HRAs). These annual adjustments provide employees with additional opportunities to save for healthcare expenses while helping employers evaluate benefit offerings for the coming year.
Higher HSA Contribution Limits for 2027
HSAs continue to be a popular way for individuals and families to save for qualified medical expenses on a tax-advantaged basis. For 2027, the IRS has increased the maximum contribution limits:
- Individual coverage increases from $4,400 to $4,500.
- Family coverage increases from $8,750 to $9,000.
- Individuals age 55 and older can continue to make an additional catch-up contribution of $1,000.
HDHP Requirements Also Increase
To qualify for HSA contributions, participants must be enrolled in a qualified High-Deductible Health Plan. The IRS has increased both the minimum deductible and maximum out-of-pocket limits for 2027.
Minimum Deductibles
- Individual coverage increases from $1,700 to $1,750.
- Family coverage increases from $3,400 to $3,500.
Maximum Out-of-Pocket Limits
- Individual coverage increases from $8,500 to $8,700.
- Family coverage increases from $17,000 to $17,400.
These adjustments help account for rising healthcare costs while maintaining the tax advantages associated with HSAs.
Increased Limits for Excepted Benefit HRAs
Employers that offer Excepted Benefit Health Reimbursement Arrangements (HRAs) will also see a modest increase in allowable contributions.
An Excepted Benefit HRA can be used to help employees pay for certain healthcare expenses, such as dental and vision coverage, that may not be included in the employer’s primary health plan.
For 2027, the maximum employer contribution increases from $2,200 to $2,250. Only employers may contribute to an HRA.
What Employers Should Do Now
Although these changes do not take effect until 2027, employers should begin reviewing their benefit strategies and budget projections well in advance of open enrollment.
Consider:
- Reviewing HSA contribution strategies and employer funding levels.
- Evaluating whether current HDHP designs will meet 2027 requirements.
- Updating employee communication materials to reflect the new limits.
- Discussing potential plan design changes with your benefits advisor.
As healthcare costs continue to evolve, understanding annual IRS adjustments can help employers and employees maximize the value of their benefits programs.
Need Assistance?
Professional Insurance Programs can help you evaluate your current health benefits strategy and prepare for upcoming regulatory changes. Contact our Benefits Team to learn more about HSAs, HDHPs, HRAs, and other employee benefits solutions available to your organization.