IRS Releases ACA Affordability Percentage, HSA Limits, and HDHP Limits
Author
With 2026 approaching fast, the IRS has begun to release some of next year’s indexing adjustments and benefit limits for health and welfare plans.
One of the most-watched IRS adjustments each year is the required contribution percentage used to determine whether employer-sponsored health coverage is considered affordable under the Affordable Care Act (ACA).
Quick Look
- The IRS has increased the affordability baseline from 9.02% in 2025 to 9.96% in 2026.
- All Applicable Large Employers (ALEs) subject to the ACA employer mandate have to offer affordable, minimum value coverage to their ACA full-time employees.
For 2026, this means that a job-based health plan’s employee-only coverage needs to cost 9.96% or less of the employee’s household income to be considered affordable. The cost is the amount the employee pays for the insurance, not the plan’s total premium.
As a reminder, failure to meet ACA affordability can result in tax penalties for the employer. For 2026, the “A” penalty is $3,340 and the “B” penalty is $5,010. As a reminder, these penalties are calculated monthly. The monthly penalty is equal to the annual penalty listed above divided by 12. The IRS only counts full-time employees calculating penalties.
2026 Limits for HSAs and High Deductible Health Plans (HDHPs)
The IRS recently released Rev. Proc. 2025-19, which contains the 2026 limits for HSAs and high deductible health plans (HDHPs). Qualified individuals with self-only coverage will be able to contribute $4,400, a $100 increase from 2025. Qualified individuals with family coverage may contribute up to $8,750, a $200 increase from 2025. As always, individuals age 55 and older may make an additional $1,000 catch-up contribution.
To be eligible, individuals must be enrolled in an HDHP with a minimum deductible of $1,700 for self-only coverage and $3,400 for family coverage. The maximum out-of-pocket expense limit will increase to $8,500 for self-only coverage and $17,000 for family coverage.
There is a lot more information plan sponsors and participants will need to properly plan for 2026, including the ACA affordability limit and the FSA limit. Check back often, as the table below will be updated as new 2026 limits are released.
| 2025 | 2026 | |
|---|---|---|
| HSA Contribution Limit – Single | $4,300 | $4,400 |
| HSA Contribution Limit – Family | $8,550 | $8,750 |
| HSA Contribution Limit – 55+ Catch-Up Contribution | $1,000 | $1,000 |
| Minimum HDHP Deductible – Single | $1,650 | $1,700 |
| Minimum HDHP Deductible – Family | $3,300 | $3,400 |
| Plan Out-of-Pocket Maximum for HSA Eligibility – Single | $8,300 | $8,500 |
| Plan Out-of-Pocket Maximum for HSA Eligibility – Family | $16,600 | $17,000 |
| Plan Out-of-Pocket Maximums for Traditional Plans – Single | $9,200 | $10,150 |
| Plan Out-of-Pocket Maximums for Traditional Plans – Family | $18,400 | $20,300 |
The information the IRS has provided thus far is helpful, but there is still a lot of information coming as employers plan for 2026. As you plan for the year ahead, reach out to OneDigital's compliance consulting team to learn the 2026 limits and how they can impact the benefit plans you offer and participate in.
For additional guidance on ACA compliance obligations, check out the Affordable Care Act Reporting Cheat Sheet.