2027 HSA Contribution Limits, HDHP Requirements & More | Excelforce

Each year, the Internal Revenue Service (IRS) adjusts contribution limits and other thresholds for certain employer-sponsored health benefits to account for inflation. While these updates may seem like routine annual changes, they can influence payroll deductions, benefits administration, open enrollment communications, and employee financial planning.

For the 2027 plan year, the IRS increased Health Savings Account (HSA) contribution limits, adjusted the minimum deductible and maximum out-of-pocket requirements for High Deductible Health Plans (HDHPs), and raised the maximum annual amount for Excepted Benefit Health Reimbursement Arrangements (EBHRAs). The Department of Health and Human Services (HHS) also updated the Affordable Care Act (ACA) annual out-of-pocket maximums for non-grandfathered health plans.

Whether you're reviewing your benefits strategy, preparing for open enrollment, or simply staying current with annual compliance updates, understanding these new limits can help you plan ahead and communicate changes more effectively with employees.

In this guide, we'll break down the 2027 HSA contribution limits, HDHP requirements, EBHRA maximums, and ACA out-of-pocket limits, explain what each update means, and outline the steps employers should consider before the new plan year begins. 

Table of Contents

• What Is a Health Savings Account (HSA)?
• 2027 HSA Contribution Limits
• 2027 High Deductible Health Plan (HDHP) Requirements
• 2027 Excepted Benefit HRA Limits
• 2027 ACA Out-of-Pocket Maximums
• What Employers Should Do Before the 2027 Plan Year
• Frequently Asked Questions About 2027 HSA Limits

What Is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is a tax-advantaged savings account that allows eligible individuals to set aside money for qualified medical expenses. HSAs are available to individuals enrolled in a qualifying High Deductible Health Plan (HDHP) and can be funded by the employee, the employer, or both.

Unlike many other healthcare spending accounts, HSA funds remain in the account year after year, allowing employees to build savings for future medical expenses. Withdrawals used for qualified medical expenses are generally tax-free under federal tax law, making HSAs a valuable tool for both short-term healthcare costs and long-term financial planning.

Each year, the IRS establishes the maximum amount that can be contributed to an HSA, along with the minimum deductible and maximum out-of-pocket requirements an HDHP must meet for HSA eligibility. Understanding these annual updates can help employers administer benefits accurately and help employees make informed enrollment decisions.

2027 HSA Contribution Limits

The IRS has increased the annual Health Savings Account (HSA) contribution limits for the 2027 plan year, giving eligible individuals the opportunity to save more for qualified medical expenses on a tax-advantaged basis. These annual limits apply to the combined total of employee and employer contributions made to an individual's HSA.

Employees who are age 55 or older by the end of the tax year may continue to make an additional catch-up contribution of $1,000, which remains unchanged for 2027.

While the increases are relatively modest, employers should review payroll deduction elections, employer contribution strategies, and open enrollment materials to ensure they reflect the updated limits before the 2027 plan year begins. Employees who want to maximize their HSA contributions should also consider adjusting their payroll deductions to take advantage of the higher annual limits.

You Might Want to Read: Open Enrollment Guide for Employers: Checklist and FAQs

Did You Know? HSAs are individually owned accounts, meaning employees keep their HSA funds even if they change jobs or retire. Unused balances roll over from year to year, making HSAs a valuable tool for both current healthcare expenses and long-term savings.

2027 High Deductible Health Plan (HDHP) Requirements

To be eligible to contribute to a Health Savings Account (HSA), individuals generally must be enrolled in a qualifying High Deductible Health Plan (HDHP). Each year, the IRS establishes the minimum deductible and maximum out-of-pocket amounts a health plan must meet to qualify as an HDHP.

For the 2027 plan year, both the minimum deductibles and maximum out-of-pocket limits have increased.

Out-of-pocket expenses include deductibles, copayments, and coinsurance, but do not include insurance premiums. 

It's important to note that these IRS limits determine whether a health plan qualifies as an HDHP for HSA eligibility. They are different from the Affordable Care Act (ACA) annual out-of-pocket maximums, which apply to non-grandfathered health plans and are discussed later in this article.

Because HSA eligibility depends in part on enrollment in a qualifying HDHP, employers should review their health plan designs each year to ensure they continue to meet the latest IRS requirements. Employees who are unsure whether their health plan qualifies should contact their employer or benefits administrator before making HSA contributions.

2027 Excepted Benefit HRA Limits

The IRS also announced the maximum annual benefit amount for Excepted Benefit Health Reimbursement Arrangements (EBHRAs) for the 2027 plan year.

An EBHRA is an employer-funded health reimbursement arrangement that can help employees pay for certain eligible healthcare expenses and other eligible benefits that may not be covered by their primary health plan. Unlike a Health Savings Account (HSA), employees cannot contribute to an EBHRA, and participation is determined by the employer's benefits program.

For the 2027 plan year, the maximum amount an employer may make available through an EBHRA is $2,250 (an increase of $50 from 2026)

Not every employer offers an EBHRA, but for organizations that do, it's important to review plan documents and funding strategies each year to ensure they align with the latest IRS maximum benefit amount. Employers should also communicate any updates to employees before open enrollment so they understand the benefits available to them.

Read Next: 30+ Creative Employee Benefits to Help Your Company Stand Out

2027 ACA Out-of-Pocket Maximums

In addition to the annual HSA and HDHP adjustments, the U.S. Department of Health and Human Services (HHS) has updated the Affordable Care Act (ACA) annual out-of-pocket maximums for plan years beginning in 2027.

These limits apply to non-grandfathered health plans and cap the amount participants pay each year for covered in-network essential health benefits through deductibles, copayments, coinsurance, and other covered cost-sharing expenses.

For the 2027 plan year, the ACA out-of-pocket maximums are:

Although both the IRS and the ACA establish annual healthcare-related limits, they serve different purposes.

• HDHP out-of-pocket limits determine whether a health plan qualifies as a High Deductible Health Plan, which is one requirement for HSA eligibility.
• ACA out-of-pocket maximums limit how much individuals with non-grandfathered health plans pay for covered in-network essential health benefits (EHBs) during a plan year.

Understanding the distinction can help employers accurately administer health plans and answer employee questions during open enrollment.

What Employers Should Do Before the 2027 Plan Year

Although the updated IRS limits do not take effect until the 2027 plan year, reviewing them now can help employers prepare for open enrollment and avoid last-minute administrative changes. Taking a proactive approach also gives employees more time to understand how the new limits may affect their benefits elections and contribution strategies.

Consider the following steps as you prepare for the 2027 plan year:

1. Review HSA Contribution Strategies

If your organization contributes to employee HSAs, confirm that employer contribution amounts align with the updated IRS limits. Employees who wish to maximize their HSA contributions may also need to adjust their payroll deductions for the new plan year.

2. Update Payroll and Benefits Systems

Review your payroll processes and benefits administration workflows to ensure the new contribution limits are reflected before 2027 elections begin. If needed, update payroll deduction limits and benefits administration settings before the new plan year begins. Updating these settings in advance can help minimize payroll corrections and improve the employee experience.

Related Resource: Top Payroll Errors Employers Make and How to Fix Them

3. Review Open Enrollment Materials

Update employee communications, enrollment guides, and benefits summaries to reflect the new HSA contribution limits and any applicable changes to your health plans. Clear communication can help employees make informed decisions during open enrollment.

Related Resource: Open Enrollment Guide for Employers: Checklist and FAQs

4. Evaluate Your Health Plan Offerings

If your organization offers a High Deductible Health Plan, confirm that it continues to meet the IRS HDHP requirements for HSA eligibility. Employers offering Excepted Benefit HRAs should also review annual funding limits and plan documentation.

5. Stay Current on Regulatory Updates

IRS contribution limits and other benefits-related requirements may change from year to year. Regularly reviewing updates can help employers maintain compliance and keep payroll and benefits administration running smoothly.

Disclaimer: The information in this article is intended for general educational purposes only and should not be considered legal, tax, or benefits advice. Because IRS guidance and healthcare regulations can change, employers should consult their benefits advisor, tax professional, HR advisor, or legal counsel regarding their specific circumstances.

You Might Want to Read:

• Open Enrollment Guide for Employers: Checklist and FAQs
• 30+ Creative Employee Benefits to Help Your Company Stand Out
• Top Payroll Errors Employers Make and How to Fix Them

Frequently Asked Questions (FAQs) About 2027 HSA Limits

©2026 - Content on this blog is intended to provide helpful, general information. Because laws and regulations evolve, please consult an HR professional or legal expert for guidance specific to your situation.