Starting in 2027, the contribution limit for self-only health savings accounts will rise to $4,500 from $4,400 in 2026, while the limit for family coverage will increase to $9,000, up from $8,750.
HSAs provide significant tax advantages, including tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses, but eligibility requires a high-deductible health insurance plan. As of 2024, over 59 million Americans held HSAs, with a notable increase in the percentage of employers offering investment options for HSA contributions.
However, only 20% of participants invested their assets, indicating a tendency to use HSAs for immediate expenses rather than long-term growth. The focus on HSAs has intensified among Congressional Republicans, particularly in light of rising healthcare costs and the expiration of enhanced subsidies for marketplace health insurance.
Critics argue that HSAs disproportionately benefit higher-income individuals who can afford to contribute and leave funds to grow tax-free, raising concerns about their effectiveness in addressing broader healthcare affordability issues as the midterm elections approach