2026 HSA contribution limits and HDHP requirements: What expats and taxpayers need to know
The IRS has released the new health savings account (HSA) contribution limits and high deductible health plan (HDHP) thresholds for tax year 2026. While the increases are modest, they reflect adjustments for inflation and can impact both health care budgeting and tax strategy.
If you're enrolled in an HDHP or considering opening an HSA, here's a full breakdown of what’s changing – and what it means for you.
What is an HSA?
A health savings account (HSA) is a tax-advantaged account that allows individuals with qualifying high deductible health plans (HDHPs) to save money for medical expenses. HSAs can also be a strategic savings vehicle for long-term healthcare and retirement planning.
Triple tax benefits
- Contributions are tax-deductible (or pre-tax via payroll deductions).
- Growth is tax-free.
- Withdrawals are tax-free when used for qualified medical expenses.
HSAs are also portable (they stay with you if you change jobs) and funds roll over year to year without expiration.
2026 HSA contribution limits
The IRS has increased the HSA contribution limits slightly for 2026:
Annual contribution maximums
- Self-only HDHP coverage: $4,400 (up from $4,300 in 2025)
- Family HDHP coverage: $8,750 (up from $8,550 in 2025)
Catch-up contribution for 55+
- Individuals aged 55 and over can contribute an additional $1,000, unchanged from previous years.
NOTE! If both spouses are over 55, they must have separate HSAs to each make the $1,000 catch-up contribution.
2026 HDHP minimum deductible and out-of-pocket limits
To qualify for HSA contributions, your health plan must meet the IRS's definition of a high deductible health plan.
Minimum annual deductibles
- Self-only coverage: $1,700 (up from $1,650 in 2025)
- Family coverage: $3,400 (up from $3,300 in 2025)
Maximum out-of-pocket limits (not including premiums)
- Self-only coverage: $8,500 (up from $8,300 in 2025)
- Family coverage: $17,000 (up from $16,600 in 2025)
NOTE! These limits apply to in-network expenses. Out-of-network costs may differ depending on your plan.
2026 HRA limit
The IRS also announced a small increase in the Health Reimbursement Arrangement (HRA) cap:
- Maximum HRA benefit for 2026: $2,200 (up from $2,150 in 2025)
HRAs are employer-funded accounts that reimburse employees for medical expenses. They’re not portable like HSAs but still offer pre-tax reimbursement benefits.
HSA eligibility rules
To contribute to an HSA, you must:
- Be enrolled in an HSA-qualified HDHP.
- Not be enrolled in Medicare.
- Not be claimed as a dependent on someone else’s tax return.
- Not be covered by any non-HSA-qualified health plans (including most general-purpose FSAs).
Contribution deadlines and prorating rules
Standard contribution deadline
You have until the federal tax filing deadline (typically April 15) of the following year to make contributions for the current tax year.
Partial-year coverage rules
If you’re only covered by an HSA-eligible HDHP for part of the year, you generally prorate your contribution limit based on the number of months you were eligible.
However, if you’re covered on December 1, you can use the last-month rule to contribute the full annual amount – but only if you stay eligible through December 31 of the following year.
Failing to do so can result in income taxes and a 10% penalty on excess contributions.
Tax penalties to avoid
Excess contributions
If you contribute more than the allowed limit, the IRS may assess a 6% excise tax on the excess every year until it’s corrected.
Non-qualified withdrawals
If you’re under age 65 and withdraw HSA funds for non-qualified expenses, you’ll owe income tax plus a 20% penalty on the withdrawal.
If you're 65 or older, the 20% penalty disappears, though regular income tax still applies.
How HSAs compare to FSAs and HRAs
| Feature | HSA | FSA | HRA |
|---|---|---|---|
| Tax-deductible contributions | Yes | Yes | Employer-only funding |
| Funds roll over year-to-year | Yes | No (some grace period or rollover exceptions) | Varies |
| Portable | Yes | No | No |
| Investment options | Yes | No | No |
Using HSAs for long-term planning
More employers and financial experts now recommend HSAs as retirement health savings tools.
Since funds roll over and can be invested, HSAs are a powerful addition to a retirement portfolio.
After age 65, you can even use your HSA funds for non-medical expenses without a penalty (you’ll just pay income tax, similar to a traditional IRA).
Bottom line
HSAs offer a unique blend of flexibility, tax savings, and long-term value. While the contribution increases for 2026 are modest, they can still add up – especially when combined with catch-up contributions and employer matches.
If you’re eligible for an HSA, take advantage of it not only to save on health expenses today, but to plan smarter for tomorrow.
