Many employee benefits are subject to annual dollar limits that are adjusted for inflation each year. The dollar limits that will apply for the next calendar year are typically announced before the beginning of that year. This gives employers time to update their plan designs and make sure their plan administration is consistent with the new limits.
This article includes the key employee benefits limits for 2027, including:
Health Plan Cost-Sharing Limits for 2027 Plan Years
On Jan. 29, 2026, the U.S. Department of Health and Human Services (HHS) released the maximum limits on cost sharing for 2027 plan years under the Affordable Care Act (ACA). For 2027, the maximum annual limitation on cost sharing is $12,000 for self-only coverage and $24,000 for family coverage. This represents an approximately 13.2% increase from the 2026 cost-sharing limits of $10,600 for self-only coverage and $21,200 for family coverage. Employers should review their plan designs each year to ensure they comply with the ACA’s cost-sharing limits.
The ACA requires most health plans to comply with annual limits on total enrollee cost sharing for essential health benefits (EHBs). These cost-sharing limits are commonly referred to as an out-of-pocket maximums (OOPM). The ACA’s cost-sharing limits apply to all non-grandfathered health plans, including self-insured health plans, level-funded health plans and fully insured health plans of any size.
Under the ACA, EHBs must reflect the scope of benefits covered by a typical employer plan and include items and services in 10 general categories, including emergency services, hospitalization, prescription drugs, pediatric services, outpatient care, and maternity and newborn care. Because the ACA’s cost-sharing limits apply only to EHBs, plans are not required to apply the annual OOPM to benefits that are not EHBs.
Once the OOPM is reached for the year, the enrollee cannot be responsible for additional cost sharing for EHBs for the remainder of the year. Any out-of-pocket expenses required by or on behalf of an enrollee with respect to EHBs must count towards the cost-sharing limit. This includes deductibles, copayments, coinsurance and similar charges but excludes premiums and spending for noncovered services. Health plans that use provider networks are not required to count an enrollee’s expenses for out-of-network benefits toward the cost-sharing limit.
The ACA’s cost-sharing limit for self-only coverage applies to each individual, regardless of whether they have self-only coverage or family coverage. This requires health plans to embed an individual OOPM in family coverage if the family OOPM is greater than the ACA’s cost-sharing limit for self-only coverage ($12,000 for 2027 plan years). Many health plans are designed with an OOPM that is much lower than the ACA’s cost-sharing limits. However, to comply with the ACA, health plans must have an OOPM for family coverage that is not greater than the ACA’s cost-sharing limit for self-only coverage ($12,000 for 2027) or incorporate an embedded individual OOPM for family coverage that is not greater than the ACA’s self-only coverage limit.
High deductible health plans (HDHPs) that are compatible with health savings accounts must comply with lower limits on out-of-pocket costs. The IRS has not published the HDHP cost-sharing limits for 2027 yet. However, for 2026 plan years, an HDHP’s OOPM cannot exceed $8,500 for self-only coverage and $17,000 for family coverage.
2027 HSA and HDHP Limits
On May 29, 2026, the IRS released Revenue Procedure 2026-24 to provide inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2027. The IRS is required to publish these limits by June 1 of each year.
These limits include the following:
- The maximum HSA contribution limit;
- The minimum deductible amount for HDHPs; and
- The maximum out-of-pocket expense limit for HDHPs.
These limits vary based on whether an individual has self-only or family coverage under an HDHP.
Eligible individuals with self-only HDHP coverage will be able to contribute $4,500 to their HSAs for 2027, up from $4,400 for 2026. Eligible individuals with family HDHP coverage will be able to contribute $9,000 to their HSAs for 2027, up from $8,750 for 2026. Individuals age 55 and older may make an additional $1,000 “catch-up” contribution to their HSAs.
The minimum deductible amount for HDHPs increases to $1,750 for self-only coverage and $3,500 for family coverage for 2027 (up from $1,700 for self-only coverage and $3,400 for family coverage for 2026). The HDHP maximum out-of-pocket expense limit increases to $8,700 for self-only coverage and $17,400 for family coverage for 2027 (up from $8,500 for self-only coverage and $17,000 for family coverage for 2026).
The following charts shows the HSA and HDHP limits for 2027 compared to 2026. It also includes the catch-up contribution limit that applies to HSA-eligible individuals age 55 and older, which is not adjusted for inflation and stays the same from year to year. The IRS limits for HSA contributions, as well as the minimum deductible and out-of-pocket maximum limits for high deductible health plans (HDHPs), will increase for 2027.
Employers sponsoring HDHPs should review their plans’ cost-sharing limits (i.e., the minimum deductible amount and the maximum out-of-pocket expense limit) when preparing for the plan year beginning in 2027.
Employers allowing employees to make pre-tax HSA contributions should update their plan communications with the increased contribution limits. Also, to prevent adverse tax consequences for employees, employers should review their benefit election processes and work with their payroll providers to help keep pre-tax HSA contributions within the adjusted IRS limits as much as possible.
- IRS Revenue Procedure 2025-19—HSA limits for 2026
- IRS Revenue Procedure 2026-24—HSA limits for 2027
Excepted Benefit HRA Limit for 2027
On May 29, 2026, the IRS released the inflation-adjusted limit for excepted benefit health reimbursement arrangements (EBHRAs) for plan years beginning on or after Jan. 1, 2027. Effective for 2027 plan years, the maximum annual employer contribution for an EBHRA will increase to $2,250 (up from $2,200 for plan years beginning in 2026).
An EBHRA is a type of employer-funded health care account that reimburses employees for their eligible medical expenses on a tax-free basis. Employers can use EBHRAs to supplement their traditional group health plan coverage and help employees with their out-of-pocket medical expenses, including deductible, copayment and coinsurance amounts.
Employers of all sizes may offer EBHRAs. Employers must offer a traditional group health plan to employees who are eligible for the EBHRA; however, employees are not required to enroll in the employer’s group coverage (or any other type of coverage) to be eligible for the EBHRA.
As an excepted benefit, an EBHRA is not subject to the same compliance requirements that apply to traditional HRAs. For example, EBHRAs are not subject to the Affordable Care Act’s market reforms or HIPAA’s portability rules. However, the EBHRA must be made available to all similarly situated employees on the same terms, without regard to health factors. Also, an EBHRA cannot be used to reimburse premiums for individual health insurance coverage, group health coverage (other than COBRA coverage or other group continuation coverage) or Medicare coverage.
Like other types of HRAs, EBHRAs are subject to ERISA unless an exception applies. This means that Form 5500 may be required, and participants should receive a Summary Plan Description of the EBHRA and its benefits. EBHRAs are also subject to HIPAA’s privacy and security requirements and the nondiscrimination rules for self-insured health plans.
Only employers can contribute to HRAs, including EBHRAs. EBHRAs are subject to a maximum amount that may be made newly available for the plan year. This maximum amount is adjusted annually for inflation. These adjusted limits are as follows:
- For plan years beginning in 2026, the contribution limit is $2,200; and
- For plan years beginning in 2027, the contribution limit is $2,250.
This limit applies to each eligible employee, regardless of whether they have single or family health coverage. While an EBHRA may reimburse a spouse’s or dependent’s eligible medical expenses, the limit is not higher for employees with family members.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2026 Zywave, Inc. All rights reserved.
