IRS Increases 2025 Health Savings Account (HSA) Limits
The IRS recently announced increases to 2025 Health Savings Accounts (HSAs) limits, as well as the maximum amount that may be made newly available for health reimbursement arrangements (HRAs).
HSAs are pre-tax accounts available to individuals covered under a high-deductible health plan that allows them to accumulate tax-free money to pay for qualified medical expenses. To participate in an HSA, the policyholder must, among other requirements, be enrolled in an HSA-qualified high-deductible health plan with a minimum annual deductible (not applicable to preventative services).
For 2025, the annual maximum HSA contribution will be:
- $4,300 for individuals with self-only coverage (an increase of $150 from 2024); and
- $8,550 for family coverage (an increase of $250 from 2024).
A high-deductible health plan is defined — for 2025 — as a health plan with an annual minimum deductible of:
- $1,650 for self-only coverage (an increase of $150 from 2024); or
- $3,300 for family coverage (an increase of $100 from 2024).
The maximum annual out-of-pocket expenses (deductibles, co-payments and other amounts — but not premiums) will also increase to:
- $8,300 for self-only coverage (an increase of $250 from 2024); or
- $16,600 for family coverage (an increase of $500 from 2024).
Unlike HSAs, HRAs are solely funded by an employer. Employees are reimbursed — tax free — for qualified medical expenses up to a maximum amount. For plan years beginning in 2025, the maximum amount that may be made newly available for the plan year for an excepted benefit HRA is $2,150 — a $50 increase from 2024.
Be sure to add the new HSA limits to relevant employee communications, such as open enrollment and communication materials, plan documents and summary plan descriptions.
For more information on health savings account limits, visit the IRS website.
Katie Culliton, Editor, CalChamber
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