This maximum HSA contribution overview has been updated with info for the 2024 and 2025 tax years. If you’ve been following this site, you know that I am a long-time advocate for health savings accounts (HSAs) and have consistently made the maximum annual HSA contributions whenever I was eligible. Excitingly, the IRS has just announced an inflation adjustment increase for the maximum HSA contribution amounts for 2025. This raises the bar significantly compared to the previously announced maximum HSA contributions for 2024. Both individual and family HSA contribution limits (detailed below) will see an increase from 2024 to 2025, which is great news for savers.
The IRS typically announces annual inflation increases for HSAs in May, separate from retirement accounts (e.g., 401Ks, IRAs), which it updates in November. Given the inflation hike in the past year, there will be a substantial increase next year. Additionally, there will be higher minimum annual deductibles and out-of-pocket expenses for HDHPs. But, why should you care about these HSA maximum contributions? Let’s discuss further.
The Increased Value of HSA Accounts in Recent Years
HSAs have always been a valuable tool for covering qualified medical expenses such as doctor visits, flu shots, prescription drugs, surgery, and prescription glasses. Recent legislation has further enhanced the value of HSA accounts, making it possible to use HSA, FSA, and HRA funds for OTC medications and menstrual care products. The ability to use these accounts for non-prescribed OTC items, revoked in 2011, has now been reinstated.
Furthermore, the IRS has provided guidance that encourages HSA-eligible HDHPs to consider certain medical services, medications, and devices—as “preventative care“—fully covered by the insurer before the deductible. This includes items such as insulin, inhalers, and statins.
HSAs: A Goldmine for Savers
HSAs hold considerable value for those who prioritize saving. They are like IRAs on tax-free steroids. You contribute pre-tax money, enjoy tax-free investment gains, and make tax-free withdrawals for eligible medical expenses. What’s more, you own the HSA account, meaning it follows you regardless of your employment status or health plan—unlike FSAs, which are employer-tied. Sadly, FSA funds cannot be rolled over to an HSA.
Your eligibility to make annual HSA contributions depends on your enrollment in a high deductible health plan (HDHP), as defined by the IRS.
HDHP Definitions for 2024
- Minimum annual deductible: At least $1,600 for individual coverage or $3,200 for family coverage; and
- Annual out-of-pocket expense maximums: Up to $8,050 for individual coverage or $16,100 for family coverage.
HDHP Definitions for 2025
- Minimum annual deductible: At least $1,650 for individual coverage or $3,300 for family coverage; and
- Annual out-of-pocket expense maximums: Up to $8,300 for individual coverage or $16,600 for family coverage.
Make sure to consider these changes when open enrollment comes around this fall. Now, let’s dive into the exciting part – the HSA maximum contribution amounts for 2024 and 2025.
2024 Maximum HSA Contribution Limits
The maximum HSA contribution amounts for 2024 are:
- Individual Plan: $4,150 (+$300 over the prior year)
- Family Plan: $8,300 (+$550 over the prior year)
Note: The maximum HSA contribution includes both employer and employee contributions.
2025 Maximum HSA Contribution Limits
The maximum HSA contribution amounts for 2025 are:
- Individual Plan: $4,300 (+$150 over the prior year)
- Family Plan: $8,550 (+$250 over the prior year)
Note: The maximum HSA contribution includes both employer and employee contributions.
2024 & 2025 HSA Catch-Up Contribution Amounts
Like IRAs and 401Ks, there are catch-up contributions for those aged 55 and over. The HSA catch-up contribution is $1,000 per eligible individual (+$1,000 for an individual plan and +$2,000 for a family plan) for both 2024 and 2025.
Can You Contribute to an HSA Outside of Employer Payroll Deductions?
Absolutely! You can contribute to an HSA outside of your employer, and the tax-deductible benefits are the same. However, you’ll need to wait until you file your yearly taxes to fully realize these benefits.
When is the HSA Contribution Deadline?
The HSA contribution deadline coincides with the tax deadline. This allows you extra time after the calendar year ends to retroactively make HSA contributions for that year, up until the tax deadline.
The Case for Maxing Out Your HSA Contribution
Here’s why you should consider contributing the maximum to your HSA: If you are young and healthy, remember that healthcare costs will eventually catch up with you. HSAs allow you to build a substantial financial cushion for future medical costs while enjoying exceptional tax benefits on both contributions and withdrawals. Why pay healthcare expenses with after-tax dollars when you can use pre-tax dollars?
Once you turn 65, you can use HSA funds for any purpose without penalty (non-medical expenses are taxed like Traditional IRA distributions). Thus, there’s little downside to contributing generously. Moreover, your contributions can grow through investments, much like other retirement accounts.
During open enrollment, you’ll typically need to decide your HSA contributions for the following year. Employers usually let you contribute evenly across all pay periods, but some may allow larger contributions toward the year’s end or even permit you to front-load your HSA contributions in the beginning. Your employer might also make tax-free contributions to your HSA if you’re enrolled in their HDHP offering.
How to Open a New HSA to Maximize Your Contributions
Opening a new HSA or transferring funds from an existing one is straightforward. Check out my list of the best HSA accounts for guidance and recommendations. If your employer’s HSA isn’t optimal, you can transfer funds to a separate HSA, even while still employed. There are no restrictions against having multiple HSA accounts, so you can create a new one anytime.
HSA Discussion
- Will you be maxing out your HSA this year or next year?
- Do you view your HSA as a potential retirement account or strictly as a healthcare expense account?
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