The IRS has announced the maximum contribution levels for health savings accounts (HSAs) for 2026, along with the out-of-pocket spending limits and minimum deductibles for high-deductible health plans (HDHPs) that must be used in conjunction with HSA accounts. These new contribution limits will be effective for HSA accounts starting in the 2026 calendar year.
The Basics
An HSA is a way for an employee to allocate a tax-free percentage of their paycheck and use it to cover medical expenses. Said expenses must meet certain requirements to be covered, but the account is an asset for both employees and employers. These accounts allow employees to save for potential medical expenses for themselves or their dependents. As a benefit, the contributing amounts (though limited) don’t expire and roll over into the following year. The IRS updates the limitations of has accounts annually. This includes minimum deductible amounts, maximum contribution levels, maximums for out-of-pocket expenses and changes depending on the coverage type (individual or a family).
2026 Contribution Limits
HSA limits fluctuate each year. The chart below details the 2026 contribution limits. Since the start of 2025, the amounts allowed have increased for both individuals and families. An additional $1,000 can be contributed on top of the limitations described if the individual is 55 years of age or older, which will not increase for the 2026 calendar year.
|
Accounts
|
Type of Coverage
|
2026
|
2025
|
|
Minimum deductible amounts for the qualifying High-Deductible Health Plan (HDHP) |
Individual coverage |
$1,700 |
$1,650 |
|
Family coverage |
$3,400 |
$3,300 |
|
|
Maximum contribution HSA |
Individual coverage |
$4,400 |
$4,300 |
|
Family coverage |
$8,750 |
$8,550 |
|
|
Catch-up contributions allowed for those 55 years of age and over |
$1,000 |
$1,000 |
|
|
Maximums for HDHP out-of-pocket expenses |
Individual coverage |
$8,500 |
$8,300 |
|
Family coverage |
$17,000 |
$16,600 |
Advantages for Employers
There are multiple employer benefits when it comes to offering an HSA to employees, including lower payroll costs, a federal tax deduction and reduced administrative burden.
Neither employers nor employees are required to pay payroll taxes on HSA contributions deducted through payroll. Employers can claim a federal income tax deduction for contributions made to employees’ HSA accounts, including those made via payroll deduction. This results in reduced Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) taxes for employers.
Employees have the freedom to withdraw funds from their HSA accounts at any time without needing employer involvement, as the funds are solely theirs during and after employment. If money is taken from the HSA for something other than a qualified HSA expense, the distribution is taxed as regular income and there is a 20% tax on the amount withdrawn. This reduces the administrative burden on employers when offering this benefit. However, employers must accurately report HSA contributions on employees’ Forms W-2.
We’re Here to Help
With these new increases in HSA contribution limits, employees are sure to benefit from increased savings. However, when it comes to updating employee HSA contribution amounts, how efficient is your benefits process? We offer access to end-to-end payroll solutions that help organizations manage benefits administration through an online portal. Automatic workflows transfer demographic information, payroll deductions and compensation adjustments between our system and benefit management systems, streamlining the process for businesses. Contact us today to learn more.
