IRS Releases 2025 Limits for Health Savings Accounts (HSAs)

The IRS has announced the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for the year 2025. This information has been published in Rev. Proc. 2024-25, which outlines the updated amounts for the upcoming year.

Maximum HSA Contribution

For 2025, individuals with self-only coverage can contribute up to $4,300, while those with family coverage can contribute up to $8,550. These figures represent an increase from the 2024 limits of $4,150 and $8,300, respectively. It's worth noting that the additional catch-up contribution of $1,000 for individuals aged 55 or older remains the same.

Minimum HDHP Deductible

In addition, the minimum deductibles for an HSA-compatible HDHP will also be updated. For plan years beginning in 2025, the minimum deductible for self-only coverage will be raised to $1,650 and the minimum deductible for family coverage will be increased to $3,300. This represents an increase from the current minimum deductible amounts of $1,600 for self-only coverage and $3,200 for family coverage.

Embedded Deductibles

It is important to point out that when an employee enrolls in family coverage, the minimum deductible for individual coverage does not apply. Instead, the minimum deductible for family coverage applies in aggregate. This means that the family must incur claims of at least the minimum family deductible before the plan can begin reimbursing claims – whether through one family member or multiple family members.

If a family plan has an embedded deductible, whereby there is a separate, lower deductible on a “per individual” basis, that individual deductible must be at least as high as the minimum family deductible in order to preserve HSA eligibility for members.

For example, a plan that has a $2,000 self-only deductible and a $4,000 family deductible could not have an embedded deductible of $2,000 on the family plan as that is below the minimum family deductible set by the IRS. However, a family plan could contain an embedded deductible of $3,500 on a “per individual” basis as that is at least as high as the family minimum deductible of $3,300.

Maximum HDHP Out-of-Pocket Expense

For plan years starting in 2025, the maximum amount that participants can be responsible for paying out of pocket (excluding premiums) will be raised. Individuals with self-only coverage can now be responsible for up to $8,300, while those with family coverage can be responsible for up to $16,600. These figures represent an increase from the 2024 limits of $8,050 for self-only coverage and $16,100 for family coverage.

It's important to note that the above limitations only apply to high deductible health plans (HDHPs) that are eligible for use with a health savings account (HSA). Health plans that are not paired with an HSA are not subject to these limitations. However, it's worth mentioning that all non-grandfathered group health plans are still required to adhere to the maximum out-of-pocket limits set forth by the Affordable Care Act (ACA). These limits have already been released for the 2025 plan year, with self-only coverage capped at $9,200 and family coverage capped at $18,400.

More Information

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The above information does not constitute advice. Always contact your employee benefits broker or trusted adviser for insurance-related questions.