IRS Announces Modest Increase in 2026 HSA Contribution Limits

The Internal Revenue Service (IRS) has released updated health savings account (HSA) contribution limits for 2026, reflecting modest increases that align with ongoing inflation and healthcare cost trends.

For individuals with self-only coverage under a high deductible health plan (HDHP), the 2026 annual contribution limit will rise to $4,400, an increase of $100 from 2025. For those with family coverage, the limit will increase by $200 to $8,750.

To contribute to an HSA, individuals must be enrolled in an HDHP. These accounts allow participants to set aside pre-tax dollars for qualified medical expenses, offering both short-term savings and long-term financial planning benefits.

The IRS has also updated the definition of an HDHP for 2026:

• Minimum deductible: $1,700 for self-only coverage (up from $1,650 in 2025), and $3,400 for family coverage.
• Maximum out-of-pocket limit: $8,500 for self-only coverage and $17,000 for family coverage. These amounts apply to in-network expenses and may differ for out-of-network costs.

In addition, the maximum annual contribution to a health reimbursement arrangement (HRA) will be $2,200 for plan years starting in 2026.

While HSAs are primarily used to offset rising healthcare expenses, many financial professionals are increasingly promoting them as long-term savings tools. A recent industry survey showed a growing number of employers positioning HSAs as part of retirement planning strategies. With the rising cost of both healthcare and retirement, there's a growing push to include HSA education within broader financial wellness programs.

As contribution limits continue to climb incrementally, experts recommend that individuals review their benefits and savings strategies to maximize the long-term value of HSAs in both healthcare budgeting and retirement planning.

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