Each spring, the Internal Revenue Service announces inflation-adjusted limits applicable to Health Savings Accounts (HSAs) for the following calendar year. The IRS released the limits applicable for 2025 this week in Revenue Procedure 2024-25.
Releasing next year’s limits during the first half of the preceding calendar year allows employers to begin designing their group benefit plan offerings during the summer in time to prepare for open enrollment season later this fall. Federal law requires this early release of the limits for those reasons.
The limits are all indexed to inflation. Everyone is well aware that the rate of inflation has been historically high in recent years. Therefore, it will come as little surprise that the 2025 thresholds are all increased above the 2024 limits. In fact, the amount of 2025’s annual increases are the largest in the history of Health Savings Accounts.
For 2025, the maximum allowable annual HSA contribution for individuals with single High Deductible Health Plan (HDHP) coverage will increase to $4,300 (from $3,850 in 2024). The maximum contribution for individuals with family HDHP coverage will increase to $8,550 (from $7,750 in 2024). HSA-eligible individuals over the age of 55 by the end of 2025 can contribute an additional $1,000 per year.
The 2025 Limits
For qualifying HDHPs in 2025, the minimum required deductible will increase to $1,650 for single coverage (from $1,500 in 2024). The minimum required deductible for family coverage will increase to $3,300 (from $3,000 in 2024). The out-of-pocket maximum for HDHPs providing single coverage will increase to $8,300 (from $7,500 in 2024). For family coverage, the out-of-pocket maximum will increase to $16,600 (from $15,000 in 2024).
Additionally, for plan years beginning in 2025, the maximum amount that may be made newly available for an excepted benefit Health Reimbursement Arrangement (HRA) is $2,150.
For any compliance or strategy questions about offering Health Savings Accounts as part of your employee benefits package, send us a question here.
