Essential HSA Tips: Avoid Penalties During Open Enrollment Now

If you have a health savings account, pay close attention to the deductible on your health insurance this open enrollment season. Most workers go on autopilot, selecting the same benefits as the year before, but doing so this fall could turn into a costly mistake.

Also known as HSAs, these tax-advantaged accounts require enrollment in a high-deductible health insurance plan to make contributions. And the minimum deductible to qualify is increasing in 2027.

For singles, the deductible must be $1,750 or higher, up from $1,700 in 2026. And for family plans, the deductible must be at least $3,500, up from $3,400.

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Health plans with deductibles that were on the cusp in 2026 may not meet the new minimum deductible requirement for HSAs in 2027. HSA deductible requirements change each year based on inflation trends, and the automatic increase could have quietly disqualified your health plan without you noticing.

“This is the trap that requires no action on your part to spring,” SaveMyHSA, a company that helps HSA holders store receipts for reimbursement, warned in a recent post ahead of open enrollment.

Any contributions made into an HSA while you’re enrolled in an ineligible health insurance plan are subject to a 6% penalty, according to the IRS. So, for example, if you set up your HSA contributions to $4,500 next year, but you’re no longer in an HSA-eligible plan, that could cost you up to $270 in penalties.

What else is changing for HSAs in 2027

Deductibles aren’t the only thing getting an inflation adjustment in 2027. Maximum HSA contributions are, too. Next year, the limit rises to $4,500 for singles and $9,000 for families, for an increase of $100 and $250, respectively. Account holders 55 and older can also make an additional $1,000 in catch-up contributions.

Contributions are made on a pre-tax basis, which works to lower your taxable income. And withdrawals can be taken out tax-free at any time for qualifying medical expenses, including co-pays at the doctor’s office as well as many common drugstore purchases.

Perhaps the most unsung perk of HSAs is that the contributions can be invested, and growth of the account balance is also untaxed, giving the accounts a unique triple-tax benefit.

The problem is few HSA holders take advantage of this feature. According to the Employee Benefits Research Institute, just 18% of HSA holders invested their contributions in assets other than cash.

While you’re verifying that your 2027 deductible meets the new minimum, you should also take the time to see what investment options your employer offers for HSA contributions. Some companies offer several options, while others offer none.

If you plan to get your health insurance through the Health Insurance Exchange, recent rules from the One Big Beautiful Bill Act affect HSA eligibility. Starting in 2026, Bronze-level and catastrophic health coverage through Obamacare are now eligible for HSAs, expanding access to millions more people.

For health coverage through Obamacare, open enrollment runs from Nov. 1 to Jan. 15. For private health insurance through the workplace, open enrollment dates vary by employer but typically begin in the fall.

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