Last month, the IRS released the 2025 cost-of-living adjusted limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs). The IRS requires that in order to contribute to an HSA, an individual must be enrolled in a HDHP plan that meets the minimum deductible requirements. The minimum deductible is the amount a participant pays for health care services before the HDHP starts to pay.

Per the 2025 guidance, an HDHP musts have a deductible of at least $1,650 for individual coverage and a deductible of at least $3,300 if you have a family plan. In addition, the plan's out-of-pocket limit must be no higher than $8,300 for an individual plan or $16,600 for a family plan. The out-of-pocket limit is the most a participant will pay in one year for medical expenses covered by the HDHP.

The HDHP rules require that, unless a plan has an individual deductible of at least $3,300 in 2025 (the amount of the family deductible), the individual deductible cannot be embedded. This is to prevent an individual from having claims covered too early before the minimum family deductible is reached. With an embedded deductible, each family member has an individual deductible in addition to the overall family deductible. Meaning if an individual in the family reaches his or her deductible before the family deductible is reached, his or her services will be paid by the insurance company. Once multiple family members’ medical expenses add up and surpass the family deductible, the insurer would begin to pay covered medical expenses for all members of the family.

For non-calendar year HDHPs, the new deductibles and limits will be effective at the start of the new plan year. For example, a HDHP that starts on July 1 will be subject to the new deductible and limits on July 1, 2025. However, HSA contribution limits apply based on a calendar year even for non-calendar year plans. This is because HSAs are based on the individual participant’s tax-year, not the plan year.

Plan sponsors should check their plans and work with their brokers to prepare for these changes.  Any plan marketing materials should also be reviewed and updated for these new amounts. In addition, employers with collectively bargained plans should check to see that their Cost-Benefit Analyses (CBAs) are accurate. We have seen several CBAs that list specific deductible amounts in the agreements that, if not updated each year, can cause employees to lose HSA eligibility. 

For those that like a cheat sheet the new amounts are listed below:

• HSA Contribution Limits. The 2025 annual HSA contribution limit is $4,300 for individuals with self-only HDHP coverage (up from $4,150 in 2024), and $8,550 for individuals with family HDHP coverage (up from $8,300 in 2024).
• HDHP Minimum Deductibles. The 2025 minimum annual deductible is $1,650 for self-only HDHP coverage (up from $1,600 in 2024) and $3,300 for family HDHP coverage (up from $3,200 in 2024).
• HDHP Out-of-Pocket Maximums. The 2025 limit on out-of-pocket expenses (including items such as deductibles, copayments, and coinsurance, but not premiums) is $8,300 for self-only HDHP coverage (up from $8,050 in 2024), and $16,600 for family HDHP coverage (up from $16,100 in 2024).

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