Health Savings Account (HSA): 2026 Limits, Rules and How It Works

A health savings account (HSA) is a tax-advantaged account for medical costs, open only to people covered by a high-deductible health plan. For 2026 you can contribute up to $4,400 with self-only coverage or $8,750 with family coverage, plus $1,000 if you are 55 or older, per IRS Revenue Procedure 2025-19. The money goes in tax-deductible, grows tax-free, and comes out tax-free for qualified medical expenses, and unlike an FSA it never expires. This page covers the 2026 limits, who qualifies (including a change that lets bronze marketplace plans count from 2026), and how the account works as a retirement account after 65.

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The Short Answer

• 2026 contribution limit: $4,400 self-only, $8,750 family, plus a $1,000 catch-up at age 55 or older.
• You qualify only if you are covered by a high-deductible health plan (HDHP), have no other disqualifying coverage, are not enrolled in Medicare, and cannot be claimed as someone's dependent.
• New for 2026: bronze and catastrophic plans bought on a health insurance marketplace count as HDHPs, under Public Law 119-21.
• Three tax breaks: deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
• Before 65, money taken out for anything else is taxed and hit with a 20% additional tax. After 65, the 20% no longer applies; non-medical withdrawals are simply taxed as income.
• Nothing expires. Unused money carries over every year, and the account stays yours when you change jobs.

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2026 HSA and HDHP Limits

Limit	2025	2026
HSA contribution, self-only coverage	$4,300	$4,400
HSA contribution, family coverage	$8,550	$8,750
Catch-up contribution, age 55 or older	$1,000	$1,000
HDHP minimum deductible, self-only	$1,650	$1,700
HDHP minimum deductible, family	$3,300	$3,400
HDHP maximum out-of-pocket, self-only	$8,300	$8,500
HDHP maximum out-of-pocket, family	$16,600	$17,000

The limit covers everything that goes into your HSA in the year, from any source. Pub 969 says you must reduce what you can contribute "by the amount of any contributions made by your employer that are excludable from your income," including amounts you elect through a cafeteria plan at work. If your employer puts in $1,000 and you have self-only coverage, you can add $3,400.

You have until the tax filing deadline to contribute for a year. For 2026, that normally means contributions made up to 15 April 2027 can count toward 2026.

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Who Can Contribute

IRS Publication 969 sets four conditions. To make HSA contributions for a month:

1. You are covered under a high deductible health plan "on the first day of the month."
2. You have "no other health coverage," apart from the kinds the rules allow (Pub 969 lists accidents, disability, dental care, vision care, long-term care, and telehealth and other remote care).
3. You "aren't enrolled in Medicare."
4. You cannot be claimed as a dependent on someone else's tax return.

Eligibility is tested month by month, so the limit is prorated if you are only eligible for part of the year. The exception is the last-month rule: if you are eligible on 1 December, you are treated as eligible for the whole year and can contribute the full annual amount. The catch is a testing period running to the end of the following year. If you stop being eligible during it for reasons other than death or disability, the contributions that were only allowed because of the last-month rule are added back to income, and that amount "is also subject to a 10% additional tax."

Medicare stops contributions. "Beginning with the first month you are enrolled in Medicare, your contribution limit is zero." This includes retroactive coverage, which trips up people who enroll late: in the IRS's words, "if you delayed applying for Medicare and later your enrollment is backdated," contributions made during the backdated months become excess contributions. You can keep and spend an existing HSA after enrolling; you just cannot add to it.

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What Changed for 2026

The One Big Beautiful Bill Act, Public Law 119-21, made three changes to who can use an HSA:

• Bronze and catastrophic marketplace plans now count as HDHPs (section 71307), for months beginning after 31 December 2025. Any bronze or catastrophic plan available as individual coverage through a marketplace exchange is treated as a high deductible health plan, whether or not its deductible meets the usual HDHP figures. This opens HSAs to many people buying their own coverage.
• Direct primary care no longer disqualifies you (section 71308). A fixed-fee direct primary care arrangement is not treated as other health coverage, as long as the fees are no more than $150 a month, or twice that where the arrangement covers more than one person. The law also allows HSA money to pay those fees.
• Free or low-cost telehealth before the deductible is allowed permanently (section 71306), for plan years beginning after 31 December 2024. An HDHP can cover telehealth and remote care without a deductible and still qualify.

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The Three Tax Breaks

An HSA is the only common account that is tax-favoured on the way in, while it grows, and on the way out.

1. Contributions reduce your taxable income. You can deduct your own contributions "even if you don't itemize your deductions," and employer contributions, including your own payroll elections through a cafeteria plan, are excluded from income. Pub 969 adds that employer contributions to employees' HSAs "aren't generally subject to employment taxes," which is why contributing through payroll also saves Social Security and Medicare tax.
2. Growth is tax-free. "The interest or other earnings on the assets in the account are tax free." Many HSA providers let you invest the balance in funds once it passes a minimum cash level.
3. Withdrawals for qualified medical expenses are tax-free. You can use the money for expenses "you incur after you establish the HSA," with no requirement to take it out in the same year.

Whether those breaks outweigh the higher deductible that comes with an HDHP depends on your health costs, which is the question our guide to whether an HSA is worth it works through.

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What You Can Spend It On

Qualified medical expenses are broadly those that would count for the medical expense deduction: doctor and hospital bills, prescription drugs, dental and vision care, and many others listed in IRS Publication 502. Insurance premiums are mostly not qualified. Pub 969 names four exceptions:

• Long-term care insurance, within annual age-based limits.
• COBRA continuation coverage.
• Health coverage while receiving unemployment compensation.
• Medicare and other health coverage if you are 65 or older, but not Medigap supplemental policies.

Money taken out for anything else is added to your income, and before 65 there is "an additional 20% tax on the part of your distributions not used for qualified medical expenses." Keep receipts: you have to be able to show a withdrawal paid for a qualified expense if asked.

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Using an HSA for Retirement

Two rules turn an HSA into a retirement account for people who can afford to leave it alone:

• The 20% additional tax stops at 65. Per Pub 969, "there is no additional tax on distributions made after the date you are disabled, reach age 65, or die." After 65 a non-medical withdrawal is taxed as ordinary income, the same way as a traditional IRA or 401(k) withdrawal, while medical withdrawals stay tax-free.
• There is no deadline to reimburse yourself. Because the rule only requires the expense to be incurred after the HSA was set up, you can pay a medical bill out of pocket today, keep the receipt, and reimburse yourself from the HSA years later, tax-free, letting the balance grow in the meantime.

Healthcare is one of the larger costs in retirement, and Medicare premiums themselves become a qualified expense after 65. For a household that has already captured its 401(k) employer match, a funded and invested HSA can be the most tax-efficient account it has. Contributions stop once you enroll in Medicare, so the window for building the balance is your working years.

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Rules That Catch People Out

• A general-purpose health FSA or HRA disqualifies you. Pub 969: an employee covered by a health FSA or HRA that reimburses qualified medical expenses "can't generally make contributions to an HSA." Limited-purpose (for example dental and vision) and post-deductible arrangements are allowed. See HSA vs FSA.
• Married couples share the family limit. If either spouse has family HDHP coverage, both are treated as having family coverage, and the $8,750 is split between them. If both spouses are 55 or older, each can add a $1,000 catch-up, but "each spouse must make the additional contribution to their own HSA."
• Multiple HSAs share one limit. Your total across all HSAs cannot exceed the annual limit.
• Excess contributions carry a 6% excise tax for "each tax year the excess contribution remains in the account," so withdraw an excess promptly.
• Name a beneficiary. A spouse who inherits an HSA can treat it as their own. For anyone else, the account stops being an HSA and the balance is generally taxable to them.
• State tax can differ. Everything above is federal. State income tax treatment of HSAs is set by each state, so check yours.

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Sources & Methodology

• IRS Revenue Procedure 2025-19, for the 2026 HSA contribution limits and HDHP deductible and out-of-pocket figures.
• IRS Revenue Procedure 2024-25, for the 2025 figures.
• IRS Publication 969, for eligibility, the last-month rule and testing period, Medicare, employer contributions, qualified premiums, the 20% additional tax and its exceptions, and married-couple rules.
• Public Law 119-21, sections 71306 (telehealth), 71307 (bronze and catastrophic plans) and 71308 (direct primary care).

Pub 969's current edition is for 2025 returns. The rules we quote from it are not year-specific; the dollar figures on this page come from the revenue procedures.

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FAQ

What is the HSA contribution limit for 2026?
$4,400 for self-only coverage and $8,750 for family coverage. If you are 55 or older by the end of the year you can add $1,000.

What counts as a high deductible health plan in 2026?
A plan with a deductible of at least $1,700 self-only or $3,400 family, and out-of-pocket costs capped at $8,500 or $17,000. From 2026, bronze and catastrophic plans bought through a marketplace also count.

Can I contribute to an HSA if I am on Medicare?
No. Your contribution limit is zero from the first month of Medicare enrollment, including backdated coverage. You can still spend the money already in the account.

What happens to my HSA if I change jobs?
Nothing. The account belongs to you, not your employer, and the IRS describes it as portable: "It stays with you if you change employers or leave the work force."

Does HSA money expire at the end of the year?
No. Unused balances carry over indefinitely. That is the main difference from a health FSA.

What is the penalty for using HSA money for non-medical expenses?
Before 65, the withdrawal is taxed as income plus a 20% additional tax. From 65, or if you are disabled, there is no additional tax, only income tax.

Can I reimburse myself for an old medical bill?
Yes, if the expense was incurred after you opened the HSA. There is no deadline, so keep the receipts.

How is an HSA different from an FSA?
An HSA requires HDHP coverage, belongs to you and rolls over forever. A health FSA is employer-owned, available with most plans, and usually use-it-or-lose-it. Our HSA vs FSA guide compares them in full.

This article is for general information and is not tax or medical-coverage advice. Figures are from IRS Revenue Procedures 2025-19 and 2024-25, IRS Publication 969 and Public Law 119-21, checked against the primary sources on 2026-09-30. Check your plan documents and, for a complicated situation, a tax professional.