2025 HSA and HDHP Limits Announced by IRS

The IRS recently announced the 2025 annual limit on HSA contributions for self-only coverage will be $4,300, a 3.6 percent increase from the $4,150 limit in 2024. For family coverage, the HSA contribution limit will jump to $8,550, up 3 percent from $8,300 in 2024. The IRS has not yet revealed the 2025 catch-up contribution for savers age 55 and older. It currently stands at $1,000 for 2024, unchanged from 2023.

For 2025, a high-deductible health plan (HDHP) must have a deductible of at least $1,650 for self-only coverage, up from $1,600 in 2024, or $3,300 for family coverage, up from $3,200. Annual out-of-pocket expense maximums (deductibles, co-payments and other amounts, but not premiums) cannot exceed $8,300 for self-only coverage in 2025, or $16,600 for family coverage.

Health Savings Accounts (HSAs) are a smart way for employees to save for medical expenses, even in retirement. The experts cite their triple tax benefits: contributions are made pre-tax, the money in the accounts grows tax-free and withdrawals for qualified medical expenses are tax-free.

According to an HSA industry consulting group, HSA assets have risen to $123.3 billion in 2023, up nearly 19 percent. Research performed in 2023, showed that 64 percent of employers offer a high-deductible health plan that is linked with a savings or spending account, like an HSA. Among employers that offer HSAs, 63 percent offer contributions to their employees’ accounts.

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