The IRS on Friday released its annual inflation-adjusted amounts for health savings accounts for calendar-year 2027, with across-the-board increases.
In Revenue Procedure 2026-24, the IRS says the annual limitation on deductions for 2027 for an individual with self-only coverage under a high-deductible health plan is $4,500, up $100 from 2026.
In addition, the annual limitation on deductions for an individual with family coverage under a high-deductible health plan next year is $9,000—up from $8,750 in 2026.
For 2027, a “high-deductible health plan” is defined under Section 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,750 for self-only coverage (up $50 from 2026) or $3,500 for family coverage (up $100 from 2026), and for which the annual out-of-pocket expenses (deductibles, copayments, and other amounts, but not premiums) do not exceed $8,700 for self-only coverage (up $200 from 2026) or $17,400 for family coverage (up $400 from 2026).
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Direct primary care service arrangements
The revenue procedure also notes that the One Big Beautiful Bill Act added Section 223(c)(1)(E) to the Internal Revenue Code, which states that a direct primary care service arrangement “shall not be treated as a health plan for the purposes of section 223(c)(1)(A)(ii) provided that, with respect to any individual for any month, the aggregate fees for all DPCSAs with respect to the individual do not exceed $150 ($300 in the case of an individual with any DPCSA that covers more than one individual).”
In a blog post last December, Groom Law Group, which focuses on employee benefits, health, and retirement matters, sheds a little more light on DPCSAs and the OBBBA:
An individual covered by another “health plan” that is not an HDHP is generally not eligible to contribute to an HSA. The OBBB provides that a direct primary care service arrangement (“DPCSA”) is not a disqualifying “health plan.” Thus, an individual may be covered by a DPCSA on a pre-deductible basis without adversely affecting their ability to contribute to an HSA.
The OBBB narrowly defines a DPCSA as an arrangement under which the individual is provided Code section 213(d) medical care consisting solely of primary care services provided by primary care practitioners, where the sole compensation for such care is a fixed periodic fee. The OBBB limits this fee to $150/month for a DPCSA covering only one individual and $300/month for a DPCSA covering more than one individual.
The Fixed Periodic Fee – The Notice [2026-05] provides that the sole compensation for care provided under a DPCSA must be fixed periodic fee. A DPCSA may bill the fee for periods of more than a month, but no more than a year, provided the aggregate fees are fixed, periodic, and do not exceed the monthly limit (on an annualized basis). For example, for 2026, the fee for a single individual could be $1,800 for a year, $900 for six months, or $450 for three months.
A DPCSA does not include an arrangement that provides certain healthcare items and services to individuals on the condition that they are members in the arrangement and have paid a fixed periodic fee, but bills separately for those items and services (through insurance or otherwise). However, providers participating in the arrangement may offer certain healthcare items and services outside of the arrangement to individuals, regardless of membership in the arrangement, and separately bill both members and non-members for those items and services (through insurance or otherwise).
Definition of “primary care services” – The OBBB only defined this term by stating that it does not include procedures that require the use of general anesthesia, prescription drugs (other than vaccines), and laboratory services not typically administered in an ambulatory primary care setting. Congress specifically directed Treasury to issue regulations or other guidance, after consultation with the Secretary of HHS, regarding this definition. The Notice does not define “primary care services” but states that, although the DPCSA provision defines “primary care practitioners” by reference to SSA section 1833(x)(2)(A), it does not define “primary care services” by reference to the definition at SSA section 1833(x)(2)(B).
The Notice provides that an arrangement is not a DPCSA if the arrangement provides services other than primary care services and an individual declines to use such services. This is because whether an arrangement qualifies as a DPCSA depends on the terms of the arrangement, not the services the individual chooses to use.
Section 223(c)(1)(E) is effective for months beginning after Dec. 31, 2025. The $150 and $300 amounts are adjusted for inflation for months beginning after Dec. 31, 2026, the IRS said.
Photo credit: Martin Haesemeyer/Flickr
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Tags: health savings account, HSA, inflation, IRS
