IRS ups HSA amounts for 2027

The Internal Revenue Service released the inflation-adjusted amounts for health savings accounts and health reimbursement arrangements for 2027 on Friday, generally increasing the limits somewhat from 2026.

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In Revenue Procedure 2026-24, the IRS said the annual limitation on deductions for 2027 for an individual with self-only coverage under a high-deductible health plan is $4,500, up $100 from 2026.  For 2027, the annual limitation on deductions for an individual with family coverage under a high-deductible health plan is $9,000, up $50 from 2026.

For 2027, a “high-deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,750 for self-only coverage (up $50 from 2026) or $3,500 for family coverage (up $100 from 2026), and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $8,700 (up $200 from 2026) for self-only coverage or $17,400 (up $400 from 2026) for family coverage. 

The One Big Beautiful Bill Act added a new provision to the Tax Code involving direct primary care service arrangements. For 2027, a DPCSA is not treated as a health plan for an otherwise eligible individual if the aggregate monthly fees for all DPCSAs for the individual don’t exceed $150 or, if the individual is covered by a DPCSA that covers more than one individual, $300. Section 223(c)(1)(E) is effective for months beginning after Dec. 31, 2025.  The $150 and $300 amounts are adjusted for inflation for months starting after Dec. 31, 2026. 

The new subsection provides targeted relief for taxpayers who use DPCSAs, noted Ed Zollars of Thomas, Zollars & Lynch in his Current Federal Tax Developments blog, who added, “Historically, such arrangements risked disqualifying an individual from HSA contributions by acting as non-qualifying secondary coverage.”