Maximizing Your Health Savings: Understanding the Increased Contribution Limits for HSA’s in 2025

The IRS has announced that the contribution limit for savers with family coverage will increase in 2025. This means that those with family plans will be able to deposit up to $8,550 into their Health Savings Accounts (HSAs), up from $8,300 in 2024. The catch-up contribution for savers age 55 and older, which currently stands at $1,000 for 2024, will also be released later this year.

In order to make HSA contributions, you must have an eligible high-deductible health insurance plan. According to the IRS, a “high-deductible” plan is defined as at least $1,650 for self-only plans or $3,300 for family coverage in 2025. HSAs offer three tax benefits: an upfront deduction for contributions, tax-free growth on investments, and no taxes on withdrawals used for qualified medical expenses.

However, a survey conducted by the Plan Sponsor Council of America in 2023 found that only 19% of HSA participants invest their balance. This highlights the importance of making informed decisions when it comes to managing HSA funds and maximizing potential growth by investing the savings instead of keeping them in cash.