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The IRS announced 2027 contribution limits for Health Savings Accounts (HSAs), which offer investors a 3x tax benefit.
Starting in 2027, the new HSA contribution limit will be $4,500 for self-only plans, up from $4,400 in 2026, based on the latest inflation adjustment.
HSA limits for family insurance will also increase in 2027. That limit will jump from $8,750 to $9,000 in 2026, according to an IRS announcement Friday.
HSAs have three tax benefits. Contributions are tax-deductible, funds grow tax-free, and there are no fees on withdrawals for qualified medical expenses.
However, you must be enrolled in a qualified high-deductible health insurance plan to make contributions. About 31% of companies with employee health insurance offered high-deductible health plans eligible for HSAs in 2025, according to KFF, a health policy research group.
Many Americans also purchase these plans through the Affordable Care Act’s health insurance marketplace.
More than 59 million Americans had an HSA as of December 31, 2024, according to a study released in July by HSA investment solutions and research provider DeVenir and the American Bankers Association’s Health Savings Account Council. The study surveyed the top 20 HSA providers.
Two-thirds of employers offered investment options for 2024 HSA contributions, according to the 2025 HSA Survey, released in September by the American Council of Plan Sponsors and surveying nearly 600 U.S. employers. However, only 20% of HSA participants invested their assets in 2024, up from 18% in 2023.
“The reality is that many people need access to their funds for recurring expenses,” Hattie Greenan, director of research and communications at the American Council of Plan Sponsors, previously told CNBC.
Republicans focus on HSA expansion
Republicans in Congress are increasing their focus on HSAs in the face of rising health care costs.
President Donald Trump’s “Big and Beautiful Bill” expanded access to HSAs by making more marketplace health plans eligible for HSAs, among other changes.
President Trump’s bill did not extend enhanced subsidies for market-based health insurance that lower premiums. Larger pandemic-era tax credits expire after 2025, leaving millions of Americans uninsured.
Senate Republicans floated a prepaid HSA idea in December to offset some of the cost of expiring HSA subsidies. However, some policy experts have criticized the HSA expansion plan.
“HSAs offer the greatest tax relief to high-income individuals who can afford to contribute to the account and leave that money there for long-term tax-free investment returns,” Nicole Rapfogel, senior policy analyst at the Center on Budget and Policy Priorities, said in a blog post in February.
Meanwhile, affordability, including the cost of health care, has become a key issue as the November midterm elections approach and Republicans struggle to maintain their slim majorities in both chambers of Congress.
