IRS Increases HSA Contribution Limits

The Internal Revenue Service issued inflation adjustments for 2025 for health savings accounts in connection with high-deductible health plans in Revenue Procedure 2024-25.

HSAs are accounts that can be funded with pre-tax contributions. The funds, which can be invested, then grow tax-free and can be distributed tax-free, provided they are spent on qualified medical expenses. HSAs are therefore said to be triple-tax privileged. In order to use an HSA, an employee must be enrolled in a high-deductible health plan.

For 2025, high-deductible means “a health plan with an annual deductible that is not less than $1,650 for self-only coverage or $3,300 for family coverage.” This is an increase from $1,600 for self-only coverage and $3,200 for family coverage. A HDHP also must maintain a maximum out-of-pocket limit of $8,300 for self-only and $16,600 for family for 2025; an increase from $8,050 and $16,100, respectively.

The maximum HSA contributions also increased for 2025. For self-only coverage, an individual can contribute up to $4,300 annually or $8,550 for family coverage. The limits for 2024 had been $4,150 and $8,300, respectively.

Account holders 55 and older can contribute an additional $1,000 to either category.