2027 HSA Contribution Limits: What Changed and What It Is Worth in Payroll Tax Savings

• 2027 HSA limits: 4,500 dollars self-only, 9,000 dollars family, per IRS Revenue Procedure 2026-24.
• The 2027 HDHP minimum deductible rises to 1,750 dollars self-only and 3,500 dollars family; the out-of-pocket maximum rises to 8,700 dollars self-only and 17,400 dollars family.
• A direct primary care arrangement no longer disqualifies HSA eligibility as of January 1, 2026, under the One Big Beautiful Bill Act, capped at 150 dollars a month for one person or 300 dollars a month for more than one, per IRS Notice 2026-05.
• Running an HSA election through a Section 125 cafeteria plan instead of an after-tax payroll deduction avoids the 7.65 percent employer FICA match and the employee's own 7.65 percent FICA share on every pre-tax dollar.

Every fall, employers who sponsor a high deductible health plan have to reset HSA elections before the new plan year starts. The dollar limits moved again for 2027, and a few of the surrounding rules moved with them. Here is what changed and what it means for a payroll department running these elections through a Section 125 plan.

What are the 2027 HSA contribution limits?

The IRS set the 2027 HSA contribution limit at 4,500 dollars for an individual with self-only high deductible health plan coverage and 9,000 dollars for an individual with family coverage. Both figures are confirmed in IRS Revenue Procedure 2026-24. The catch-up contribution for account holders age 55 and older stays at 1,000 dollars, unchanged since Congress set that figure by statute in 2003 with no inflation adjustment built in.

Why the HDHP deductible and out-of-pocket numbers matter too

An employee cannot open or keep contributing to an HSA unless their health plan also qualifies as a high deductible health plan under the new numbers. For 2027, a plan needs at least a 1,750 dollar deductible for self-only coverage or 3,500 dollars for family coverage, and it cannot let out-of-pocket costs run past 8,700 dollars self-only or 17,400 dollars family. A plan renewing with a deductible below those floors stops being HSA-qualified, which is worth checking against the 2027 renewal before assuming last year's plan design still works.

What changed under the OBBBA direct primary care rule?

Before this change, an employee who paid a monthly membership fee for a direct primary care practice was often treated as having a second health plan, which could disqualify HSA contributions entirely. That risk is gone for arrangements that meet the DPCSA definition and stay under the monthly fee cap. The same OBBBA provisions also let Bronze and Catastrophic marketplace plans count as HDHPs without meeting the usual minimum deductible, and let a plan cover telehealth before the deductible is met without losing HSA eligibility, a rule that has applied since plan years beginning in 2025.

How much does a Section 125 election add in FICA savings on the 2027 increase?

The federal income tax break on an HSA contribution is the same whether the money comes out of payroll pre-tax through a Section 125 cafeteria plan or the employee deposits it directly and claims the deduction on their own return. The FICA savings are not the same. Only a payroll pre-tax election under a Section 125 plan avoids the 7.65 percent Social Security and Medicare tax on both sides, employer and employee.

Take a disclosed hypothetical employer with 40 employees electing the full 2027 family HSA maximum through payroll:

• Extra amount available to elect in 2027 versus 2026: 9,000 dollars minus 8,750 dollars equals 250 dollars per employee
• Employer FICA saved on just that increase: 250 dollars times 7.65 percent equals 19.13 dollars per employee, or about 765 dollars total across 40 employees
• Employer FICA saved on the full 9,000 dollar election, if it runs through Section 125 rather than after-tax: 9,000 dollars times 7.65 percent equals 688.50 dollars per employee, or 27,540 dollars total across 40 employees
• Employee FICA saved on that same 9,000 dollar election: another 688.50 dollars per employee, on top of whatever federal and state income tax the employee avoids

None of this happens automatically. An HSA election only picks up the FICA savings when it runs through a written Section 125 cafeteria plan document that lists HSA contributions as a qualified benefit, with the deduction coded correctly in payroll. A direct, after-tax HSA deposit still gets the income tax deduction on the employee's return, just not the FICA savings on either side.

What is the 2027 Excepted Benefit HRA limit?

The IRS also raised the excepted benefit HRA maximum newly available amount to 2,250 dollars for 2027, up from 2,200 dollars in 2026, in the same Revenue Procedure 2026-24. An excepted benefit HRA runs alongside other coverage rather than replacing it and follows different eligibility rules than an HSA, covered in more detail in Benecor's Section 125 cafeteria plan guide→.

Sources: IRS Revenue Procedure 2026-24 (2027 HSA, HDHP and excepted benefit HRA limits); IRS Revenue Procedure 2025-19 (2026 HSA and HDHP limits); One Big Beautiful Bill Act (Public Law 119-21), direct primary care and HDHP provisions; IRS Notice 2026-05 (December 9, 2025), direct primary care service arrangement guidance; IRS Publication 969 (2026).