Open Enrollment Season: What the 2027 HSA Limits Mean for Your Taxes
Fall is open enrollment season for many workplace health plans. The choices you make now can affect your tax bill for all of 2027. Here is what the IRS has already announced about Health Savings Accounts (HSAs) for next year, plus newer rules that make more people eligible.
What an HSA Does
An HSA is a savings account you can use for qualified medical expenses when you are covered by a high-deductible health plan (HDHP). According to IRS Publication 969, an HSA offers three tax benefits:
Contributions you make are generally deductible, and contributions your employer makes are not included in your income.
Earnings grow without tax while they stay in the account.
Withdrawals used for qualified medical expenses are not taxed.
Unused HSA money generally carries over from year to year, so the balance can keep building over time.
The 2027 Numbers
In Revenue Procedure 2026-24, the IRS set these amounts for 2027:
HSA contribution limit: $4,500 for self-only coverage, $9,000 for family coverage.
HDHP minimum deductible: $1,750 for self-only coverage, $3,500 for family coverage.
HDHP out-of-pocket maximum: $8,700 for self-only coverage, $17,400 for family coverage (premiums are not counted).
Excepted benefit HRA: up to $2,250 for plan years beginning in 2027.
If you are 55 or older by the end of the year, IRS Publication 969 allows an extra $1,000 catch-up contribution.
New Rules That Widen Eligibility
The 2025 tax law known as the One, Big, Beautiful Bill changed who can use an HSA. The IRS explained these changes in Notice 2026-05 and news release IR-2025-119.
Bronze and catastrophic plans. Starting January 1, 2026, bronze and catastrophic plans available as individual coverage through an Exchange are treated as HSA-compatible. The IRS notes that the same plan bought outside the Exchange also qualifies if the identical plan is offered on an Exchange.
Direct primary care. Starting in 2026, people enrolled in certain direct primary care arrangements may still contribute to an HSA. They may also use HSA funds tax-free to pay the periodic fees. In 2026, those fees cannot exceed $150 a month for one person or $300 a month for an arrangement covering more than one person.
Telehealth. A plan may cover telehealth and other remote care before you meet your deductible without making you ineligible. This rule is now permanent for plan years beginning on or after January 1, 2025.
Questions to Ask Before You Enroll
Is the plan I am choosing HSA-compatible for 2027?
How much can I realistically set aside from each paycheck, up to the annual limit?
Does my employer contribute to my HSA? Employer contributions reduce the amount you can add yourself.
Will I enroll in Medicare during the year? IRS Publication 969 says your contribution limit is zero beginning with the first month you are enrolled in Medicare.
A Word of Caution
HSA money spent on anything other than qualified medical expenses is generally taxable. IRS Publication 969 adds that it can carry an additional 20% tax, unless the withdrawal is made after you become disabled, reach age 65, or die. Keep receipts for every medical expense you pay from the account.
How We Can Help
Choosing a health plan is a personal decision, with the tax side being only one piece of it. If you want to understand how these rules fit your household or business, explore our Personal Tax Advisory services or Request a Private Consultation.
Sources
This article is for general educational purposes only and is not tax, legal, or financial advice. Tax rules change and every situation is different. Information is current as of October 14, 2026. Upscale Tax Professionals is not a law firm.
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