HSA Contribution Limits to Increase in 2026 by Nicole Bellizzi Oxford, CPA
Beginning Jan. 1, 2026, employees with high-deductible health plans will be able to save an additional $100 annually in their health savings accounts (HSAs). These triple-tax-advantaged accounts can go a long way in helping you pay healthcare costs with tax-free dollars today and in retirement.
2026 HSA Contribution Limits
The 2026 annual limit on HSA contributions for individual coverage is $4,400. For family coverage, the maximum contribution limit is $8,750, a $200 increase from 2025. Employees age 55 and older may qualify to make an additional catch-up contribution of $1,000 each year. Generally, you have until the tax filing deadline to contribute to an HSA, typically via pre-tax payroll deductions.
From a tax perspective, the pre-tax dollars you contribute to an HSA are excluded from your taxable income, making them exempt from federal taxes and providing you with a potential reduction to your taxable income in the year of contribution. Those funds are invested to grow tax-free, and withdrawals may be taken free of tax when used to pay for qualifying healthcare expenses, including doctor’s visits; dental, vision and auditory care; mental health services; prescription and over-the-counter medications; and durable medical equipment. If you need to make a withdrawal for another non-medical purpose, you will owe income tax on that amount and a penalty of 20 percent. If you withdraw the funds at age 65 or older, you will not incur a penalty, but you will be responsible for income tax.
How to Qualify for an HSA
To qualify for an HSA, an employee must have a high-deductible health plan (HDHP), which is defined as one with an annual deductible of at least $1,700 for self-only coverage and $3,400 for family coverage in 2026. In addition, the maximum out-of-pocket expenses for the year 2026, including deductibles and co-payments, may not exceed $8,500 for self-only coverage or $17,000 for family coverage. Taxpayers may also qualify to participate in an HSA when they are not enrolled in Medicare, are not claimed as dependents on another person’s income tax return and are not covered by non-HDHP coverage (subject to certain exceptions).
Other HSA Benefits
Unlike a flexible spending account (FSA), there is no deadline to use the money saved in an HSA; your balance rolls over each year. You continue to own that account and may use the funds saved to pay for qualifying healthcare expenses even if you leave your employer. At that point, you may leave the account with your previous employer, roll it over to an HSA with your new employer or transfer your savings to a new HSA with a different provider.
Finally, an HSA allows you to build a substantial financial cushion for your future healthcare needs, which are almost certainly going to rise in the future. Rather than spending down all of your HSA savings during your working years, you may choose to pay for some medical expenses out-of-pocket and keep a portion of your HSA savings invested to continue growing tax-free and help afford healthcare costs in retirement.
About the Author: Nicole Bellizzi Oxford, CPA, is a senior manager of Tax Services with Berkowitz Pollack Brant, where she provides tax planning and consulting services to high-net-worth individuals and cross-border estate and income tax planning for multi-national families. She can be reached at the firm’s Miami office at (305) 379-7000.
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