IRS boosts health savings account contribution limits for 2025

Driven by falling inflation rates as economic growth slows, the IRS has determined that annual health savings account contribution limits will increase by 3.6% for individuals and 3% for families next year. The increases nearly mirror the 3.3% inflation rate in May.

The Internal Revenue Service recently announced that for the calendar year 2025, the health savings account contribution limits for individuals with self-only coverage will jump to $4,300—up $150 from $4,150 for this year. For family coverage, the limit will increase to $8,550 next year from $8,300 in 2024.

Although the bump is far below the record-breaking increase of more than 7% this year, Jake Spiegel, research associate at the Employee Benefit Research Institute (EBRI), says employees stand to benefit nonetheless.

That’s because HSA contribution limits are indexed to inflation, which increased slower than in previous years, Spiegel says. While this means slower growth in HSA contribution limits, it also means slower growth in deductibles and out-of-pocket maximums for HSA-qualified health plans.

“For employees, it means that their health care plan’s deductible will increase at a lower rate than last year, and the HSA contribution limit increase will help them shoulder higher health care costs,” Spiegel says.

This, in turn, will help HR leaders boost employee financial wellness, he said. In a recent EBRI report, HR leaders cited the high cost of living as their top concern in this wellness area, unseating retirement preparedness as their longtime top concern. Healthcare costs, along with housing, groceries, utilities, education and other expenses, all contribute to the high cost of living.

In addition to nudging up HSA contribution limits, the IRS also increased contribution limits for high-deductible health plans by a similar percentage and for the Excepted Benefit Health Reimbursement Arrangement (EBHRA) by 2.4%. EBHRAs, according to HR tech benefits company American Benefits Group, allow employers to reimburse employees tax-free for select medical expenses not usually covered by their health insurance plan.

Here are the details of each account type’s new contribution limits for next year:

What are the 2025 HSA contribution limits?

What are the 2025 HDHP contribution limits?

 

What are the EBHRA contribution limits?

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