HSA and FSA limits for 2027: what the IRS has set so far and how to use open enrollment

The IRS has set the 2027 contribution limits for health savings accounts at $4,500 for people with self-only coverage and $9,000 for people with family coverage, according to Revenue Procedure 2026-24. Those figures are up from $4,400 and $8,750 in 2026. The limit for health flexible spending accounts in 2027 has not been announced yet. For now, the latest official figure is the 2026 limit of $3,400.

The numbers matter now because many employers hold open enrollment for 2027 benefits this fall. That is usually when you choose a health plan and decide whether, and how much, to set aside in an HSA or FSA.

HSA or FSA: the basic difference

Both accounts let you pay eligible medical costs with money that is not taxed, but they work differently.

• A health savings account (HSA) is available only if you are covered by a qualifying high-deductible health plan. The money is yours. IRS Publication 969 says an HSA is "portable," meaning it stays with you if you change employers or leave the work force, and contributions remain in the account until you use them.
• A health flexible spending arrangement (FSA) is offered through an employer. The IRS describes FSAs as generally "use-it-or-lose-it" plans. A plan can offer a grace period of up to 2 1/2 months after the plan year ends or let you carry over a limited amount, but not both.

HSA limits for 2027

To contribute to an HSA, you must be covered by a high-deductible health plan, or HDHP. The IRS sets both the contribution limits and the deductible and out-of-pocket thresholds that define those plans.

Sources: IRS Revenue Procedure 2025-19 for 2026 and Revenue Procedure 2026-24 for 2027.

A few rules from Publication 969 affect how much you can put in:

• Catch-up contributions. If you are 55 or older at the end of the tax year, your limit increases by $1,000.
• Employer money counts. Contributions your employer makes reduce the amount you can contribute yourself.
• Medicare ends contributions. Beginning with the first month you are enrolled in Medicare, your contribution limit is zero.
• Timing. You can generally make contributions for a tax year until the tax filing deadline the following April. For example, contributions for 2025 could be made through April 15, 2026.

Money spent from an HSA on qualified medical expenses is tax free, and earnings in the account are not taxed. Withdrawals for other purposes may be taxed and penalized, so check IRS rules or a tax professional before you use the money for anything else.

New HSA rules that started in 2026

The 2025 tax law known as the One, Big, Beautiful Bill expanded who can use an HSA. According to an IRS news release:

• As of Jan. 1, 2026, bronze and catastrophic plans available through a health insurance marketplace are considered HSA-compatible.
• Beginning Jan. 1, 2026, people enrolled in certain direct primary care arrangements can still contribute to an HSA and can use HSA money tax free to pay the periodic fees. For 2027, the monthly fees for those arrangements may not exceed $150 for one person or $300 for an arrangement covering more than one person.
• The law made permanent the ability to receive telehealth and other remote care before meeting the deductible without losing HSA eligibility.

FSA limits: 2026 figure, 2027 still pending

For 2026, the limit on employee salary reductions for a health FSA is $3,400, according to Revenue Procedure 2025-32. If a plan allows carryovers, the most you can carry into the next year is $680.

As of Oct. 12, the IRS had not announced the 2027 health FSA limit. The agency publishes it with its annual inflation adjustments. Last year, it released the 2026 figures on Oct. 9, 2025. If your employer's enrollment window closes before the 2027 number is out, ask your benefits office how your plan will handle the new limit.

Dependent care FSAs, which cover child care and similar costs rather than medical bills, follow separate rules. For 2026, an employee can generally exclude up to $7,500 a year in dependent care benefits, or $3,750 if married filing separately, according to IRS Publication 15-B.

How to use open enrollment

1. Check plan eligibility first. You can contribute to an HSA only if the plan you pick is a qualifying high-deductible plan. Ask your benefits office if it is not labeled.
2. Look for employer money. Some employers add money to HSAs. Remember that it counts toward the annual limit.
3. Estimate FSA spending conservatively. Because unused FSA money can be forfeited, base your election on costs you expect, such as prescriptions, regular visits, glasses or dental work.
4. Know your plan's deadline rules. Ask whether your FSA has a grace period or a carryover, and how long you have to submit receipts.
5. Confirm whether you must re-enroll. Some employers require a new FSA election every year, so do not assume last year's choice rolls over.
6. Plan around Medicare. If you or your spouse will enroll in Medicare in 2027, review how that affects HSA contributions.

This article is general information, not tax advice. For your own situation, check the IRS guidance linked above or talk with a tax professional or your employer's benefits office.