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Starting in 2025, savers with family coverage will be able to contribute up to $8,550 into their Health Savings Accounts (HSAs), an increase of $250 from the previous year. Those age 55 and older will also see an increase in their catch-up contribution, which remains at $1,000 for 2024. In order to make HSA contributions, one must have an eligible high-deductible health insurance plan.
The IRS defines a “high-deductible” plan 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 from 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.
