As we look ahead to 2026, employers offering HSAs and FSAs have new contribution limits to consider. These updates present an opportunity to review your benefits strategy, adjust your communication, and ensure your plan design remains competitive and compliant. Ignoring these changes could mean missed advantages for your employees and increased risk for your organization.
What Has Changed
The 2026 IRS limits for HSAs offer modest increases: $4,400 for self-only and $8,750 for family coverage. The catch-up contribution remains at $1,000 for those aged 55 or older. Meanwhile, health FSA contribution limits are projected to rise to $3,400 for health care FSAs. These increases reflect inflation adjustments but also provide a strategic opportunity.
Why It Matters to Employers
Firstly, higher limits enhance the value of tax-advantaged accounts for employees. When you promote these benefits clearly, you increase perceived value without increasing base compensation. For employers, ensuring your plan allows employees to take full advantage of these limits can boost enrollment and satisfaction. Secondly, plan documents, salary reduction agreements, and communications must be updated to reflect the new limits. Missing these changes can lead to compliance risks.
Action Steps for Your Organization
- Review your HSA-eligible plan designs and confirm the underlying HDHP meets the minimum deductible and out-of-pocket requirements for 2026.
- Update communications, enrollment materials and employee education to highlight the increased contribution limits and the benefits of use.
- Consider whether your employer contribution strategy to HSAs or FSAs needs adjustment in light of these higher limits.
- Monitor your plan election process to ensure employees maximize the tax-advantaged benefit.
- Use this update as a talking point during open enrollment or renewal discussions—highlighting it reinforces your focus on employee value and benefits strategy.
Final Thoughts:
The 2026 HSA and FSA contribution limit increases may appear modest on the surface, but they provide a meaningful opportunity to enhance your benefits offering and solidify employee engagement. By proactively adjusting your plan design and communication strategy you demonstrate a strategic approach to benefits—not just compliance.
