November 6, 2025

The IRS has announced an increase in the maximum contributions to Health Savings Accounts (HSAs) for 2026.

This change presents an excellent opportunity for individuals and families with high-deductible health plans (HDHPs) to maximize their healthcare savings and take advantage of the various tax benefits HSAs offer.

New HSA Contribution Limits for 2026

Here’s a breakdown of the new contribution limits for HSAs in 2026:

• For Individuals: If you have a single high-deductible health plan, the maximum contribution amount for your HSA in 2026 is $4,400. This is an increase from $4,300 in 2025.
  
  
• For Families: For those with family coverage under a high-deductible health plan, the maximum contribution rises to $8,750 in 2026, up from $8,550 in 2025.
  
  

These adjustments enable HSA holders to save more money, which can have a significant impact on long-term healthcare and retirement planning.

More Than Just a Savings Account

HSAs are a type of savings account designed to help you pay for qualified healthcare expenses now and in the future. The key advantages of an HSA lie in its unique tax benefits, often referred to as a "triple tax advantage":

• Tax-Deductible Contributions: Money contributed to an HSA is tax-deductible, reducing your annual taxable income.
  
  
• Tax-Free Growth: Funds in an HSA can be invested, and any growth, whether through interest, dividends, or capital gains, is tax-free.
  
  
• Tax-Free Withdrawals: Withdrawals from an HSA are tax-free if used to pay for qualified medical expenses incurred since the account was opened. Qualified expenses include doctor visits, dental care, acupuncture, and medications, among others.
  
  

Who Is Eligible for an HSA?

To be eligible for an HSA, you must:

• Be enrolled in a high-deductible health plan (HDHP), an "HSA-eligible plan."
  
  
  • For 2026, the IRS defines a “high deductible health plan” as a health plan with a minimum annual deductible of $1,700 for self-only coverage or $3,400 for family coverage. Additionally, the plan’s annual out-of-pocket expenses (not including premiums) cannot exceed $8,500 for self-only coverage or $17,000 for family coverage.
    
    
• Not be enrolled in Medicare.
  
  
• Not be claimed as a dependent on someone else's tax return.
  
  

If you meet these criteria, an HSA can be a valuable tool for managing healthcare expenses and building savings for anticipated higher healthcare costs in the future.

Maximizing Your HSA Benefits

One of the most strategic ways to use an HSA is to let the funds grow by not using them immediately for medical expenses. Here are a few strategies that can help maximize your HSA’s benefits:

• Pay Out of Pocket: If you can afford it, consider paying your current medical expenses out of pocket. This allows your HSA funds to remain invested and grow tax-free.
  
  
• Save Your Receipts: Keep receipts for every medical expense you pay out of pocket from the time you open your HSA. There is no expiration date on when you can reimburse yourself, so this documentation will allow you to withdraw the equivalent amount tax-free in the future.
  
  
• Let Your Funds Grow: The longer your money stays in the HSA, the more it can grow. By the time you retire, you could have a sizable fund to help cover healthcare costs, which are more expensive later in life.
  
  

Should You Have an HSA?

HSAs are a powerful financial tool, but they may not be suitable for everyone. If you're covered by a high-deductible health plan and meet the eligibility criteria, an HSA can provide significant tax advantages and long-term savings. However, deciding to open or fully fund an HSA depends on your individual tax and income situation.

If you’re unsure whether an HSA is right for you or how to maximize its benefits, we're here to help. Our team can analyze your specific financial and tax situation to determine if contributing to an HSA aligns with your goals. If you already have an HSA, we recommend fully funding it annually to maximize its tax-advantaged benefits.

HSAs can be a key component of a well-rounded healthcare and retirement strategy. By understanding and maximizing the benefits of an HSA, you can take a proactive approach to managing current and future medical expenses.

Not sure where to start? Contact us today!

References

Internal Revenue Service. (2025). Revenue Procedure 2025-19: 2026 inflation-adjusted amounts for HSAs and excepted benefit HRAs (Rev. Proc. 2025-19). https://www.irs.gov/pub/irs-drop/rp-25-19.pdf.

EBIA Checkpoint News Staff. (2025, May 8). IRS announces 2026 HSA and EBHRA contribution limits, HDHP minimum deductibles, and HDHP out-of-pocket maximums. Thomson Reuters. https://tax.thomsonreuters.com/news/irs-announces-2026-hsa-and-ebhra-contribution-limits-hdhp-minimum-deductibles-and-hdhp-out-of-pocket-maximums/ Thomson Reuters Tax.

Mayer, K. (2025, May 7). IRS announces 2026 HSA, HDHP limits. SHRM. https://www.shrm.org/topics-tools/news/benefits-compensation/irs-announces-2026-hsa-hdhp-limits.