2027 HSA and HDHP Updates Announced
The numbers for Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs) for 2027 have finally been revealed. Employers have been anticipating this information, typically shared in early May.
For 2027, the contribution limit for HSAs under self-only coverage will be $4,500, which is a 2.3% rise from 2026’s limit of $4,400. The IRS made the announcement on May 29th. Families will see an increase in their HSA contribution cap to $9,000, up from $8,750 in 2026, reflecting a 2.9% hike.
On the other hand, the minimum deductibles for HDHPs will shift to $1,750 for individual plans, increasing from $1,700 in 2026, and $3,500 for family plans, up from $3,400. The maximum out-of-pocket expense (which includes deductibles and copays, but not premiums) will be capped at $8,700 for individual plans, raising from $8,500. For family coverage, it will also go up from $17,000 to $17,400.
The IRS additionally noted that the limit for health insurance reimbursement arrangements involving excluded benefits will rise from $2,200 to $2,250 in 2026.
All these updates will come into effect on January 1, 2027.
HSAs are often praised by industry experts as a savvy way for employees to manage healthcare expenses, even during retirement. They highlight three main tax advantages: contributions are pre-tax, account growth is tax-exempt, and withdrawals for qualified medical costs are tax-free.
As healthcare expenses climb, more employees are gravitating toward HSAs, contributing larger amounts. Data from HSA provider Lively indicates that in 2025, the average account balance reached $5,457, a notable increase from $4,923 in the previous year—an 11% rise.
Around 61% of employers, according to SHRM data, currently offer HSAs.
However, experts believe that there’s a pressing need for employers to enhance employee education regarding HSAs. Many employees are contributing more, but they might not be utilizing the accounts effectively. A report from the Employee Benefits Research Institute (EBRI) found that while 67% of employees with HSAs have used them for immediate expenses over the past year, only 35% are saving for future medical costs, and just 28% have invested their funds.
“This year presents a significant chance to bridge the educational gap around HSAs,” stated Chauvin Uralil, co-founder and COO of Lively in New York City.
Uralil emphasized that employers should actively inform employees about the workings of HSAs, covering everything from contributions and investments to long-term savings strategies.
The IRS releases annual HSA limits each spring, ahead of other limits like flexible spending accounts and 401(k) contributions, allowing ample time for employers and administrators to adjust. While employers tend to promote HSAs and boost contributions during hiring periods, it’s probably wise for HR and benefits leaders to start these discussions now.
