IRS announces 2026 HSA contribution limits

[UNITED STATES] The IRS on Thursday announced the 2026 contribution limits for Health Savings Accounts (HSAs), which provide triple-tax benefits for medical expenses. Starting in 2026, the contribution limit for individuals with self-only health coverage will increase to $4,400, up from $4,300 in 2025, as a result of inflation adjustments, the IRS confirmed Thursday. For those with family coverage, the contribution cap will rise to $8,750, up from $8,550 in 2025.

These annual increases reflect growing healthcare costs and are intended to help Americans keep up with medical inflation, which has outpaced general inflation in recent years. According to the Bureau of Labor Statistics, healthcare expenses rose 3.5% year-over-year in June 2024, compared to a 2.8% increase in the Consumer Price Index for all items.

To qualify for HSA contributions in 2026, individuals must have an eligible high-deductible health plan.

For 2026, the IRS defines a high-deductible plan as one with a deductible of at least $1,700 for self-only coverage or $3,400 for family coverage. Additionally, the plan’s annual out-of-pocket maximum—including deductibles, co-payments, and other expenses—cannot exceed $8,500 for individual plans or $17,000 for family coverage.

These thresholds are designed to ensure HSAs remain accessible to those with moderate to high medical expenses. However, some critics argue that the high-deductible requirement may discourage lower-income households from participating, as they could struggle with the upfront costs before reaching their deductible. Savers have until the tax filing deadline to contribute to their HSA for the previous year, meaning 2026 contributions can be made until April 2027.

Financial advisors recommend that those eligible to contribute to an HSA invest their balances for the long term, instead of using them for immediate medical expenses—provided cash flow allows.

The reason: "Your health savings account offers three tax benefits," explained Dan Galli, a certified financial planner and owner of Daniel J. Galli & Associates in Norwell, Massachusetts. Contributions typically come with an upfront deduction, the balance grows tax-free, and funds can be withdrawn tax-free at any time for qualified medical expenses.

Legislative proposals have recently aimed at expanding HSA eligibility, such as allowing Medicare enrollees to contribute and broadening the range of medical expenses covered, including fitness and wellness programs. Though these proposals have yet to pass, advocates argue they could enhance the versatility of HSAs and appeal to a wider range of individuals.

Unlike flexible spending accounts (FSAs), HSA balances can roll over from year to year, and the account is portable between jobs, allowing individuals to retain the funds when changing employers. This portability makes HSAs “very powerful” for future retirement savings, Galli noted.

Healthcare costs in retirement can be substantial. A 65-year-old retiring in 2024 can expect to spend an average of $165,000 on medical expenses throughout retirement, according to Fidelity. This figure does not include the cost of long-term care.

A 2024 survey by the Plan Sponsor Council of America, which polled over 500 employers, found that two-thirds of companies offered investment options for HSA contributions. However, just 18% of participants were investing their HSA balances, a slight decrease from the previous year.

“Ultimately, most participants still use their HSAs for current healthcare expenses,” said Hattie Greenan, director of research and communications for the Plan Sponsor Council of America.