2026 HSA Contribution Limits: What to Know

2026 HSA Contribution Limits: What to Know

HSA Eligibility Requirements

Not everyone can open or contribute to an HSA. Eligibility is determined by IRS rules and depends largely on the type of health coverage you have.

To be eligible for an HSA, you must be enrolled in an HSA-qualified HDHP. You cannot be enrolled in Medicare, and you cannot be claimed as a dependent on someone else’s tax return.

You also cannot have other disqualifying health coverage. This includes general-purpose healthcare Flexible Spending Accounts (FSA) or Health Reimbursement Arrangements (HRA) that pay for medical expenses before you meet your deductible. However, certain exceptions exist. Limited Purpose FSAs, which cover only dental and vision expenses, and post-deductible HRAs are generally allowed and do not disqualify HSA eligibility.

Eligibility rules can become more complex for households with access to multiple benefits, so it is important to review plan details carefully during open enrollment.

2026 HSA Contribution Limits

For 2026, the IRS has increased the annual limits for HSA contributions to account for inflation.

The maximum contribution limit for individuals with self-only HDHP coverage is $4,400. Those with family coverage can contribute up to $8,750. These limits combine employee and employer contributions.

HSA contributions can be made through payroll deductions or directly to the account. Contributions for a given tax year can generally be made up until the tax filing deadline of the following year, which gives account holders additional flexibility if they want to top off their contributions after the year ends.

The IRS adjusts HSA contribution limits annually based on inflation, so increases from year to year are common. Staying aware of these changes helps ensure you are maximizing your available tax benefits.

2026 HSA Catch-Up Contributions

Account holders who are age 55 or older by the end of the calendar year are eligible to make an additional catch-up contribution. For 2026, the catch-up contribution limit is $1,000. Unlike the standard HSA limits, this amount is not indexed for inflation.

Catch-up contributions are allowed per individual. If both spouses are age 55 or older, each spouse must have their own HSA to make a catch-up contribution. A single HSA cannot receive two catch-up contributions, even if both spouses are eligible.

It is also important to note that individuals enrolled in Medicare are no longer eligible to contribute to an HSA, including catch-up contributions. Timing Medicare enrollment carefully can help avoid unintended contribution penalties.

HDHP Requirements for HSA Eligibility in 2026

HSAs are only available to individuals enrolled in a High Deductible Health Plan that meets IRS standards. For 2026, an HDHP must meet both deductible and out-of-pocket maximum requirements.

The minimum annual deductible for individual coverage is $1,700. For family coverage, the minimum deductible is $3,400. These are the amounts you must pay out-of-pocket before most plan benefits begin.

The maximum out-of-pocket limits for 2026 are $8,500 for individual coverage and $17,000 for family coverage. These limits cap the total amount you are responsible for paying through deductibles, copays, and coinsurance during the year.

Not all plans with high deductibles qualify as HDHPs, so it is important to verify that a plan is HSA-qualified before contributing.

Consequences of Overcontributing to an HSA

Contributing more than the annual HSA limit can lead to penalties. Excess contributions are subject to a 6% excise tax for each year the excess remains in the account.

The good news is that excess contributions can usually be corrected if addressed before the tax filing deadline. This typically involves withdrawing the excess amount and any associated earnings.

Tracking both personal and employer contributions throughout the year is essential to avoiding these issues, especially for individuals who change jobs or coverage midyear.

Employer HSA Contributions

Employers can contribute to employee HSAs as part of a benefits package. These contributions count toward the annual HSA limit and must be coordinated with employee contributions to avoid exceeding the maximum.

Employer contributions offer tax advantages for both parties. Contributions are tax-deductible for the employer and are not subject to payroll taxes. For employees, employer contributions are excluded from taxable income.

Common employer contribution structures include flat annual contributions, matching employee contributions, or seed contributions made at the beginning of the year. These contributions can help offset the higher deductibles associated with HDHPs and encourage employee participation.

What Business Owners Should Know

For business owners, offering an HDHP paired with an HSA can be an effective benefits strategy. Employer HSA contributions can help attract and retain employees while reducing payroll tax liability. Employees need to understand eligibility rules, contribution limits, and how HSAs differ from FSAs or traditional health plans. A well-communicated HSA program can improve benefit satisfaction without significantly increasing benefit costs.

Strategies for Maximizing an HSA

• For those who can afford it, contributing the maximum allowed amount each year can create significant tax savings.
• Many people also choose to invest HSA funds once their account balance allows, treating the HSA as a long-term savings vehicle rather than a short-term spending account. 
• Some account holders pay for current medical expenses out-of-pocket and let their HSA balance grow, saving receipts for future reimbursement. 
• Coordinating HSA contributions with a spouse’s benefits and other tax-advantaged accounts can further improve overall savings.

Discover HSA Solutions & More with Group Benefits Brokers From BIS Benefits

An HSA can provide more opportunities to save for healthcare expenses while reducing taxes. With limits of $4,400 for individual coverage and $8,750 for family coverage, plus catch-up contributions for those 55 and older, HSAs remain one of the most flexible and valuable benefits available. By working with an experienced HSA broker, businesses can protect themselves and their employees and prepare for a prosperous future. 

BIS Benefits is dedicated to helping Georgia-based businesses with 15 or more employees find the right group benefits and commercial insurance solutions. Our insurance brokers have years of experience and a full understanding of programs like Flexible Spending Accounts and Health Savings Accounts. Request a Quote from BIS today to find out how we can help your business find the coverage that fits your needs.