On May 9th, the IRS announced updates for health savings account (HSA) contribution limits and high-deductible health plan (HDHP) requirements through Rev. Proc. 2024-25. Similar to last year, updates for the 2025 tax year include increases for contribution limits, minimum deductibles, and out-of-pocket maximums, though smaller than the previous year's adjustments.
HSA contribution limit updates
HSA contribution limits will increase for both individuals and families in 2025 by 3.61% and 3.01%.
For individuals, 2025 HSA contribution limits will increase by $150 to $4,300, a year-over-year increase of 3.61%. For families, 2025 HSA contribution limits will increase by $250 to $8,550, a year-over-year increase of 3.01%.
HSA contribution limits 101
What does this mean for consumers? Health savings accounts provide three main tax advantages:
- Tax-free contributions
- Tax-free spending on eligible items, and
- Tax-free balance growth (i.e., investing).
With higher HSA contribution limits, account holders can use their HSA to protect more of their income from payroll taxes and use those savings for healthcare expenses.
Minimum deductible and out-of-pocket maximum updates
The IRS also updated its federal definition of high-deductible health plans (HDHPs) by increasing deductibles by 3.13% and out-of-pocket maximums by 3.11%.
For individual high-deductible health plans in 2025:
- The minimum deductible will increase by $50 to $1,650 for a year-over-year increase of 3.13%.
- The maximum out-of-pocket expenses will increase by $250 to $8,300 for a year-over-year increase of 3.11%.
For family high-deductible health plans in 2025:
- The minimum deductible will increase by $100 to $3,300 for a year-over-year increase of 3.13%.
- The maximum out-of-pocket expense will increase by $500 to $16,600 for a year-over-year increase of 3.11%.
HDHPÂ requirements 101
What does this mean for consumers? To contribute to an HSA, the IRS requires account holders to:
- Not be enrolled in Medicare
- Not be claimed as a dependent on someone else's tax return, and
- Be covered by a federally defined high-deductible health insurance plan (HDHP) on the first day of the month
Today, the IRS updated its definition of a high-deductible health plan, which will impact eligibility for HSA contributions in 2025.
Deductible and Out-of-pocket definitions
- ‍Minimum deductible: The minimum amount a policyholder must pay for healthcare services before their insurance coverage kicks in. Note: HSA-eligible plans include coverage of preventive services, like an annual checkup with your doctor. ‍
- Out-of-pocket maximum: The maximum amount a policyholder can pay for healthcare services in a given plan year. Once a policyholder hits this limit, a plan covers 100% of the remaining covered expenses for the rest of the plan year.
The history of HSA contribution limit adjustments
How did the IRS adjustments for 2025 line up with previous years? Let's take a look.
Last year's adjustments by the IRS for 2024 were the largest in history as the IRS increased the individual and family contribution limit by 7.8% and 7.1%, respectively. The next highest year? 2023.
Yesterday's announced adjustments of 3.61% (self) and 3.01% (family) do not continue this record-breaking trend, reflecting a lower calculated rate of inflation by IRS economists.
