On Thursday, the IRS shared the contribution limits for Health Savings Accounts (HSAs) for 2026, ensuring the benefits of triple tax advantages on healthcare expenses. The recent update indicates that for self-only health insurance, the contribution limit will increase to $4,400—up from $4,300 in 2025, thanks to inflation adjustments.
For those with family coverage, the new limit will rise to $8,750, an increase from $8,550 in 2025.
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To make contributions to HSAs in 2026, you’ll need to have a qualified high-deductible health insurance plan. The IRS defines a high deductible as at least $1,700 for self-only coverage and $3,400 for family plans. Furthermore, the total deductible and other amounts should not exceed $8,500 for individual plans and $17,000 for family coverage.
It’s important to note that contributions must be made by the tax deadline the following year, meaning your last opportunity to contribute for 2026 will be in April 2027.
HSAs offer triple tax advantages
If you’re eligible to contribute to an HSA, a financial advisor might suggest investing your balance for the long term instead of using the funds for immediate medical expenses this year.
The rationale? “Your Health Savings Account comes with three tax benefits,” explains Dungari, a certified financial planner at Daniel J. Galli & Associates in Norwell, Massachusetts.
Typically, there’s a tax deduction on contributions, the balance grows tax-free, and you can withdraw funds tax-free for qualified medical expenses at any time. This is different from flexible spending accounts (FSAs), where contributions can’t be rolled over year to year. HSAs allow you to maintain your balance even when changing jobs, making them quite advantageous for retirement savings, according to Gali.
When it comes to retirement, out-of-pocket medical costs can be significant. Fidelity projects that the average 65-year-old retiring in 2024 will face about $165,000 in medical expenses, not including long-term care costs.
Most HSAs cover current expenses
According to a survey from the American Planning Sponsors Council in November, around two-thirds of companies offered investment options within HSAs. However, only 18% of participants reported investing their HSA balances, a slight increase from the previous year.
“Ultimately, most users continue to tap into their HSA for immediate healthcare costs,” noted Hatty Green, director of research and communications for the American Planning and Sponsors Council, in a discussion with CNBC.
