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IRS Announces 2025 Inflation Adjustments for Health Savings Accounts

May 30, 2024

Last month, the Internal Revenue Service (IRS) announced the annual inflation adjustments for health savings accounts (HSAs) for 2025, indicating a continued rise in prices, though the inflation rate is slowing.

Key Adjustments for 2025

Revenue Procedure 2024-25 outlines the inflation-adjusted amounts for HSAs under Section 223 of the Tax Code. It also details the maximum allowable amounts for health reimbursement arrangements under Section 54.9831-1(c)(3)(viii) of the Pension Excise Tax Regulations.

HSA Deduction Limits

  • Self-only coverage: The annual deduction limit will increase to $4,300 in 2025, up from $4,150 in 2024.
  • Family coverage: The annual deduction limit will rise to $8,550 in 2025, up from $8,300 in 2024.

High-Deductible Health Plan Definition

A “high-deductible health plan” for 2025 is:

  • Self-only coverage: An annual deductible of at least $1,650 (up from $1,600 in 2024) and annual out-of-pocket expenses not exceeding $8,300 (up from $8,050 in 2024).
  • Family coverage: An annual deductible of at least $3,300 (up from $3,200 in 2024) and annual out-of-pocket expenses not exceeding $16,600 (up from $16,100 in 2024).

Health Reimbursement Arrangements

  • Excepted benefit HRA: The maximum amount that can be newly allocated will increase to $2,150 in 2025, up from $2,100 in 2024.

These adjustments ensure that the contribution limits and deductible thresholds for HSAs and HRAs remain aligned with the rising costs due to inflation.