HSA Contribution Limits for 2027: The Complete Employer Guide

The 2027 HSA contribution limits are official. The IRS announced the new numbers in Revenue Procedure 2026-24 on May 29, 2026, well ahead of the new plan year. Employers who sponsor a high deductible health plan, or who let employees fund an HSA through payroll, need to update plan documents and payroll systems before January 1, 2027.

This guide breaks down the new contribution limits, the new HDHP deductible and out-of-pocket rules, and how a Section 125 plan can turn HSA contributions into payroll tax savings for both the employer and the employee.

What Are the 2027 HSA Contribution Limits?

The 2027 HSA contribution limit is $4,500 for self-only coverage and $9,000 for family coverage. Both figures increased from 2026, when the limits were $4,400 for self-only coverage and $8,750 for family coverage, according to the IRS.

The self-only limit rose by $100 and the family limit rose by $250 from 2026 to 2027. These are the maximum amounts an individual and their employer can contribute combined into an HSA for the year, not separate limits for each party.

An employee with family HDHP coverage who is also 55 or older can contribute up to $10,000 total in 2027, once the $1,000 catch-up amount is added to the $9,000 family limit.

What Changed for HDHP Deductibles and Out-of-Pocket Limits in 2027?

A health plan must meet minimum deductible and maximum out-of-pocket rules to qualify as an HDHP for HSA purposes, and both numbers went up for 2027. To qualify as an HDHP in 2027, a plan needs an annual deductible of at least $1,750 for self-only coverage and $3,500 for family coverage, up from $1,700 and $3,400 in 2026.

The maximum out-of-pocket amount for an HDHP in 2027 is $8,700 for self-only coverage and $17,400 for family coverage, up from $8,500 and $17,000 in 2026. Out-of-pocket maximum includes deductibles, copayments, and coinsurance, but not premiums.

Employers who renew HDHP plans on a calendar-year basis should confirm the plan's 2027 deductible and out-of-pocket structure meets these new floors and ceilings before open enrollment. A plan that does not meet the minimum deductible no longer qualifies as an HDHP, and employees would lose the ability to contribute to an HSA under that plan.

How Does the HSA Catch-Up Contribution Work in 2027?

The HSA catch-up contribution stays at $1,000 for 2027, unchanged from 2026 and every year since it was introduced. Unlike the base contribution limits, the catch-up amount is set by statute and is not adjusted for inflation, so it only changes if Congress passes a new law.

Employees turn 55 at any point during the year and are still eligible for the full $1,000 catch-up for that entire tax year. Each spouse with their own HSA and their own HDHP coverage who is 55 or older can claim their own $1,000 catch-up. A married couple, both 55 or older, both enrolled in family HDHP coverage through separate HSAs, could shelter up to $9,000 plus $1,000 plus $1,000 across their two accounts in 2027.

How Do HSA Contributions Through a Section 125 Plan Save on FICA Taxes?

An HSA contribution made through a Section 125 plan reduces the employee's taxable wages before federal income tax, state income tax where it applies, and FICA are calculated. A Section 125 cafeteria plan is an IRS-recognized structure that lets an employer offer this pre-tax payroll deduction for HSA contributions, along with other qualified benefits.

The FICA savings run both directions. FICA tax is 7.65% combined, split 6.2% for Social Security and 1.45% for Medicare, and applies equally to the employer and the employee. When an employee elects $200 per month toward their HSA through a Section 125 plan instead of contributing after tax, both the employee and the employer avoid FICA on that $200 every month.

For a 10-person business where employees contribute an average of $150 per month each toward HSAs through a Section 125 plan, the employer avoids roughly $137.70 per month in FICA, or about $1,652 per year, according to the math on the combined 7.65% employer FICA rate. <a href="/blog/maximizing-fica-tax-savings">See the full FICA savings math for pre-tax benefits</a> for the calculation across different election amounts and headcounts.

Employers who do not currently run HSA contributions through a Section 125 plan and instead let employees fund their HSA directly with after-tax dollars are leaving this FICA savings uncaptured on both sides. Employees can still deduct after-tax HSA contributions on their personal tax return, but that deduction never reduces FICA, since FICA is calculated on payroll wages, not on the personal income tax return. <a href="/blog/section-125-cafeteria-plan-2026-guide">Read the complete Section 125 cafeteria plan guide</a> to see how HSA elections fit alongside medical, dental, and other pre-tax benefits.

What Should Employers Do Before the 2027 Plan Year Starts?

Employers with a calendar-year HDHP and HSA program should update their plan documents, payroll system contribution caps, and open enrollment materials to reflect the new 2027 limits before January 1, 2027. Payroll systems that cap HSA payroll deductions at the 2026 limit will block employees from reaching the new 2027 maximum if the cap is not updated.

HR teams should also confirm the HDHP itself still qualifies under the new 2027 deductible floor, since a plan that renews with the same deductible structure as 2026 could fall below the new $1,750 self-only or $3,500 family minimum. <a href="/blog/health-insurance-premium-increase-2026-by-state">Review current premium trends by state</a> when comparing HDHP options for the coming plan year.

Employers evaluating whether a traditional group plan, a level-funded plan, or an ICHRA fits better alongside HSA-eligible coverage should compare the options before locking in a 2027 renewal. <a href="/blog/how-does-ichra-work">Learn how ICHRA works</a> and <a href="/blog/small-business-health-insurance-alternatives-2026">compare small business health insurance alternatives</a> before making a final decision.

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Frequently Asked Questions

Sources: Internal Revenue Service, Revenue Procedure 2026-24 (HSA and HDHP inflation-adjusted limits for 2027, released May 29, 2026); Internal Revenue Service, Publication 969 (Health Savings Accounts and Other Tax-Favored Health Plans).