Health Savings Account owners will be able to contribute more—just a little bit more anyway—to the triple-tax-advantaged accounts in 2025. Today the IRS released 2025 contribution limits for HSAs, and is raising limits by $150 for individuals and by $250 for individuals with family coverage compared to this year’s limits.
For calendar year 2025, the annual HSA contribution limit for an individual with self-only coverage under a high-deductible health plan (HDHP) will be $4,300, up from $4,150 in 2024.
According to IRS Revenue Procedure 2024-25, for calendar year 2025, the annual HSA contribution limit for an individual with self-only coverage under a high-deductible health plan (HDHP) will be $4,300, up from $4,150 in 2024. For an individual with family coverage, the amount will be $8,550, up from $8,300.
The small increase comes on the heels of HSA contribution limits getting their biggest-ever boost in 2024, when the limit jumped from $3,850 in 2023 to $4,150 for individuals and from $7,750 in 2023 to $8,300 in 2024.
Those who are age 55 or older by the end of the year can contribute an additional $1,000 to their HSA.
To be eligible to contribute, a participant must have an HSA-qualified high-deductible health plan (HDHP) and not be enrolled in Medicare. The IRS also updated the definition of an HDHP for 2025. Next year, a health plan with an annual deductible that isn’t less than $1,650 for self-only coverage, up from $1,600 this year, or $3,300 for family coverage, up from $3,200 in 2024, will be defined as a high-deductible health plan.
Yearly out-of-pocket expenses (deductibles, copayments, and other amounts, but not premiums) won’t be able to exceed $8,300 for self-only coverage (up from $8,050 in 2024) or $16,600 for family coverage (up from $16,100).
An HSA allows individuals to set aside pre-tax money to pay for out-of-pocket medical expenses such as copayments, deductibles, and other qualified expenses. HSA funds can also be used to pay for Medicare Part B, Part D, and Medicare Advantage premiums, for those 65 or older.
A health savings account does not require the account holder to begin distributing funds at a certain age. These funds remain in the account and are not “use it or lose it” like other types of flexible savings accounts.
Fully portable HSAs have long been attractive (if underutilized) for offering one of the best tax breaks in the entire tax code. They are uniquely triple-tax-advantaged, as contributions to the HSA reduce a person’s taxable income; the earnings grow tax-free; and qualified withdrawals (used to pay qualified health care expenses) are tax-free.
Devenir, a national leader in providing investment solutions for HSAs, recently reported that there was about $123 billion saved in over 37 million HSAs at the end of 2023. That’s a year-over-year increase of 19% for assets and 5% for accounts.
“Our latest survey results not only show robust growth in HSA assets but also projects a strong, upward trajectory for the future, indicating a steady and significant expansion of the HSA market,” said Jon Robb, SVP of research and technology at Devenir.
Devenir currently projects that the market will approach 44 million accounts by the end of 2026, holding $168 billion in assets.
Read the complete details about the 2025 HSA contribution limits in IRS Revenue Procedure 2024-25. The increases go into effect in January 2025.
SEE ALSO:
• Fidelity HSA Assets Hit Record-High $24 Billion
• 2025 401(k) Contribution Limit Forecast: $1,000 Increase on Tap?
• HSA Contribution Limits Get Biggest-Ever Boost for 2024