Information Regarding ERISA Compliance and Health Plan Audits

HSA Contribution Limits Increase for 2025

Health savings accounts (HSAs) are tax-advantaged medical savings accounts that can be offered to individuals enrolled in a high-deductible health plan (HDHP). HSA funds can be used to pay for medical expenses covered by the HDHP before meeting the deductible or medical expenses not covered under the HDHP. Limits include the following:

  • The maximum HSA contribution limit;
  • The minimum deductible amount for HDHPs; and
  • The maximum out-of-pocket expense limit for HDHPs.

Contribution limits

HSA contributions, interest, and amounts distributed for qualified medical expenses are exempt from federal tax income, Social Security/Medicare tax, and most state income taxes. The potential tax savings come with strict rules for the HSA, including annual contribution limits. The 2025 contribution limit is:

  • $4,300 (up $150) for individuals with self-only HDHP coverage and
  • $8,550 (up $250) for individuals with family HDHP coverage.

Individuals aged 55 or older are able to make an additional $1,000 contribution (no change since 2024), called the “catch-up” contribution. The HDHP minimum deductible for 2025 plan years is:

  • $1,650 (up $50) for self-only HDHP coverage and
  • $3,300 (up $100) for family HDHP coverage.

The HDHP Maximum Out-of-Pocket for 2025 experienced increases for both self-only and family. The HDHP Maximum Out-of-Pocket Limit for 2025 plan year is:

  • $8,300 (up $250) for self-only HDHP out-of-pocket
  • $16,600 (up $500) for family HDHP out-of-pocket

Benefits of an HSA

In addition to being tax-advantaged, HSAs are attractive due to the fact the employee owns the account and can maintain access even if they switch plans or jobs. Additionally, HSA funds carry over year to year and are not subject to a deadline.

 

If you have any questions about HSAs, please contact your dedicated Creative Benefits, Inc. team member.