IRS Releases HSA, HDHP and Other Limits for 2027

The IRS released updated inflation-adjusted limits for Health Savings Accounts (HSAs), high deductible health plans (HDHPs), direct primary care service arrangements (DPCSAs), and excepted benefit HRAs. These updated amounts apply for calendar year 2027 (or plan years beginning in 2027, as applicable) and reflect ongoing annual cost-of-living adjustments.

2027 Benefit Limits

Employers sponsoring non-grandfathered HSA compatible HDHPs must ensure its family coverage also includes an embedded individual out of pocket maximum (OOPM) for each individual covered under the family plan in order to comply with the ACA cost sharing requirements, unless the aggregate family HDHP OOPM does not exceed the ACA individual OOPM ($12,000 for 2027). Any embedded deductibles or OOPMs for family HDHP coverage must at a minimum meet the HDHP minimum deductible for family coverage ($3,400 for 2027).

It should be noted that individuals who are age 55 or older and covered by an HSA-compatible HDHP may make an additional HSA catch-up contribution of $1,000 each year until they enroll in Medicare. This catch-up contribution amount has not increased since 2009.

As a reminder, employers that include DPCSAs must ensure their plans do not exceed the monthly limit, or $1,800 for the year along with other design requirements in order for individuals to retain HSA eligibility. Employers are permitted to bill quarterly, bi-annually, or annually provided the amount is fixed and does not exceed the IRS monthly limit.

Employer Action

• Confirm 2027 HDHP deductible and out-of-pocket limits meet IRS minimum and maximum thresholds.
• Adjust HSA contribution limits and HRA funding caps in payroll and benefits platforms for 2027.
• Prepare open enrollment materials to reflect new limits and explain impacts to employee contributions and plan options.