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HSA-eligible health plans in 2027: What to know about tax savings vs. higher deductibles
Workers choosing 2027 health coverage must weigh HSA tax savings against higher deductibles and out-of-pocket costs.
Key points
- The IRS says a 2027 HSA-eligible plan generally needs a deductible of at least $1,750 individual or $3,500 family.
- Out-of-pocket expenses, excluding premiums, cannot exceed $8,700 for individual coverage or $17,400 for family coverage.
- HSA contributions made through an employer's Section 125 cafeteria plan generally avoid Social Security and Medicare taxes.
Why it matters. Workers choosing 2027 coverage may find HSA tax benefits offset by higher deductibles and out-of-pocket costs, depending on their expected healthcare needs.
The U.S. Internal Revenue Service says a 2027 HSA-eligible health plan must generally have a deductible of at least $1,750 for individual coverage or $3,500 for family coverage. Annual out-of-pocket costs, excluding premiums, cannot exceed $8,700 for an individual or $17,400 for a family. A recent Marsh employer survey found 63% of U.S. health plan sponsors with at least 50 employees offer a qualifying high-deductible plan.
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HSA-eligible health plans in 2027: What to know about tax savings vs. higher deductibles
Many employees are eligible to choose an HSA-eligible high-deductible health plan during open enrollment. Here's what to know before enrolling. Colorado Democratic congressional candidate Manny Rutinel greets Ariella Thomas during Protect Our Care's "Sick Of It" nationwide bus tour, in Denver, Colorado, Oct. 26, 2026. Tom Cooper | Getty Images Entertainment | Getty Images Healthcare affordability was part of the midterm election cost-of-living debate . It is uncertain how a new Congress might try to address that pain point. Now, as workers choose their 2027 health insurance coverage , millions face a more immediate decision: whether to pick a plan that lets them contribute to a health savings account, or HSA. The question is whether an HSA-eligible plan with lower premiums and tax benefits is worth the higher deductible and potential out-of-pocket costs. HSAs come with a 'triple tax advantage' One noted advantage of an HSA is its tax benefits. "You have a triple tax advantage," said Kalei Cadinha-Pua'a, vice chair and CEO of Honolulu-based Cadinha & Co., which ranked No. 21 on this year's CNBC Financial Advisor 100 list. Employer and employee contributions go into the fund before taxes, earnings in the account aren't taxed while they remain in the HSA, and withdrawals for qualified medical expenses are tax-free. Financial advisors say employees often overlook another potential .