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The HSA Contribution Rules: Part I

By Brian Gilmore | Published February 5, 2025

Question: What are the HSA contribution rules for different situations such as employee-only coverage, family coverage, catch-up eligible employees, employees who lose HSA eligibility mid-year, and employees who gain HSA eligibility mid-year?

Short Answer: In general, there are different HSA contribution limits based on employee-only vs. family coverage, whether the employee is age 55+, and the number of months in the year for which the individual is HSA-eligible. There is also a special rule referred to as the last-month rule that provides additional options for those gaining HSA-eligibility mid-year.

Starting Point: Only HSA-Eligible Individuals Can Establish and Contribute to an HSA

Health Savings Account (HSA) eligibility is required for any individual to open and make contributions to an HSA (e.g., through the employer’s payroll or as a direct deposit) or receive contributions to an HSA (e.g., the employer contribution made available to employees enrolled in the HDHP).

Individuals must satisfy the following four requirements to be HSA-eligible:

1. Be covered by a qualified high deductible health plan (HDHP);
2. Have no other disqualifying health coverage;
3. Not be enrolled in any part of Medicare; and
4. Not be able to be claimed as a dependent on someone else’s current-year tax return.

For more details:

• The HSA Eligibility Requirements Part I
• The HSA Eligibility Requirements Part II
• Newfront Go All the Way With HSA Guide

HSA Contribution Limits Adjust Annually for Inflation The IRS issues annual updates by June 1 announcing the HSA contribution limit increases for the following year. The cost-of-living adjustments are based on the Chained Consumer Price Index for All Urban Consumers (C-CPI-U). HSA contribution limits are based on the calendar year. They are not related to the HDHP plan year.

• For more details: The 2025 HSA Contribution Limits

The HSA Contribution Limit: HDHP Employee-Only Coverage Where an employee is enrolled in individual-only HDHP coverage and HSA-eligible for the entire calendar year, the contribution limit is the statutory limit for individual coverage ($4,300 in 2025).

The HSA Contribution Limit: HDHP Family Coverage HSA-eligible employees can contribute to the family limit ($8,550 in 2025) if they enroll in family HDHP coverage for the entire calendar year (or take advantage of the last-month rule, as outlined in Part II).

The HSA rules define family HDHP coverage as any coverage other than self-only coverage. This means that employees who are HSA-eligible and cover at least one other individual under the HDHP (e.g., employee + spouse, employee + domestic partner, employee + child(ren), employee + family) can contribute up to the family HSA limit.

The family HSA contribution limit is available regardless of:

• Whether the other covered family members are HSA-eligible (e.g., the family members may also be enrolled in non-HDHP coverage or Medicare);
• Whether the other covered family members are eligible for tax-free coverage under the plan (e.g., non-tax dependent domestic partners).

Example 1:

• Ben enrolls in HDHP coverage for himself and his domestic partner Julianna for all of 2025 (and has no disqualifying coverage).

Result 1:

• Ben is eligible to make the full $8,550 family HSA contribution limit for 2025.
• The fact that Julianna is a non-tax dependent domestic partner and has other disqualifying coverage is irrelevant for purposes of Ben’s ability to contribute to the family HSA limit.
• Note that Julianna cannot make or receive HSA contributions to an HSA in her name because she is not HSA-eligible.

For more details: HSAs and Family Members

Special Rule for Married Individuals Where Both Spouses are HSA-Eligible The rules for married HSA-eligible individuals depend on the type of HDHP coverage in which the spouses are enrolled.

Both Spouses Enrolled in Employee-Only HDHP Coverage If both spouses are HSA-eligible and enrolled in separate employee-only HDHP coverage, the standard individual HSA contribution limit applies to each spouse. Both the employee and the spouse can contribute up to the individual contribution limit ($4,300 in 2025) to their respective HSAs. In this situation, marriage does not affect each spouse’s standard contribution limit.

Example 2:

• Married couple Buster and Kristen are both HSA-eligible and enrolled in employee-only HDHP coverage through their respective employers for the full calendar year.

Result 2:

• Buster can contribute up to the individual HSA contribution limit ($4,300 in 2025) in his HSA.
• Kristen can contribute up to the individual HSA contribution limit ($4,300 in 2025) in her HSA.
• There is no option to contribute more than the individual contribution limit to either spouse’s HSA.

At Least One Spouse Enrolled in Family HDHP Coverage If one or both spouses are enrolled in family HDHP coverage, a special combined HSA contribution limit applies.

Examples of family situations where the special combined spousal rule apply include:

• Employee covers the spouse under the employee’s HDHP
• Employee covers the spouse and children under the employee’s HDHP
• Employee covers the children under the employee’s HDHP, and the spouse is enrolled in employee-only coverage through the spouse’s employer
• Employee is enrolled in employee-only HDHP coverage, and the spouse covers the children under the spouse’s HDHP

Under this special rule, the combined HSA contribution limit for both spouses is the family HSA contribution limit. In other words, the aggregate HSA contribution limit for both spouses cannot exceed $8,550 (2025). The spouses can agree on how they would like to divide the combined limit between them, provided the total HSA contribution by both does not exceed the family limit.

Example 3:

• Married couple Buster and Kristen are both HSA-eligible.
• Buster is enrolled in employee plus child HDHP coverage for the full calendar year.
• Kristen is enrolled in employee only HDHP coverage for the full calendar year.

Result 3:

• Option 1: Buster can contribute up to the family HSA contribution limit ($8,550 in 2025) in his HSA—with no HSA contributions by Kristen (or her employer).
• Option 2: Kristen can contribute up to the family HSA contribution limit ($8,550 in 2025) in her HSA—with no HSA contributions by Buster (or his employer).
• Option 3: Buster and Kristen can agree to divide the family HSA contribution maximum between their HSAs (e.g., in 2025 Buster contributes $5,000 to his HSA, Kristen contributes $3,550 to her HSA).

For more details: Special HSA Contribution Limit for Spouses

Special Considerations for Domestic Partnerships The special combined family HSA contribution limit described above does not apply to domestic partners because they are not spouses.

Domestic Partner HDHP Enrollment Permits Family Contribution Limit The HSA rules define family HDHP coverage as any coverage other than self-only coverage. This means that employees who are HSA-eligible and cover at least one other individual under the HDHP can contribute up to the family HSA limit.

The family contribution limit ($8,550 in 2025) is available regardless of which other individuals are covered under the HDHP. The other individuals could be the employee’s spouse, domestic partner, child(ren), etc. Furthermore, the other covered individuals do not need to be eligible for tax-free coverage under the HDHP or HSA-eligible for the family contribution limit to apply.

Example 4:

• Oprah enrolls in HDHP coverage for herself and her domestic partner Stedman for all of 2025 (and has no disqualifying coverage).
• Oprah’s (non-tax dependent) domestic partner Stedman also has employee-only coverage under a non-HDHP HMO plan with his employer.

Result 4:

• Oprah is eligible to make the full $8,550 family HSA contribution limit for 2025 because she has at least one other individual covered under the HDHP.
• The facts that Stedman is a non-tax dependent domestic partner and has other disqualifying coverage are irrelevant for purposes of Oprah’s ability to contribute to the family HSA limit.
• Note that Stedman cannot make or receive HSA contributions to an HSA in his name because he is not HSA-eligible.

Double Family Contribution Limit Available Where Both Domestic Partners are HSA-Eligible For married couples where one or both spouses are enrolled in family HDHP coverage, the special combined family contribution rule described above applies to limit the aggregate contribution to the family HSA maximum. However, the special combined family HSA contribution limit does not apply to domestic partners because they are not spouses. Furthermore, the family HSA contribution limit applies for all HSA-eligible individuals in any coverage other than self-only coverage.

The surprising result is that if both domestic partners are HSA-eligible and enrolled in family HSA coverage, they can each contribute the family HSA maximum to their respective HSAs.

Example 5:

• Domestic partners Oprah and Stedman are both HSA-eligible and enrolled in Oprah’s HDHP coverage (employee + domestic partner) for the full 2025 calendar year.

Result 5:

• Oprah and Stedman can both contribute to the family HSA contribution limit in their respective HSAs.
• The family HSA contribution limit is available for Oprah’s HSA and Stedman’s HSA because they are both enrolled in HDHP coverage other than self-only (employee + domestic partner).
• Because they are not married, the special combined family HSA contribution limit does not apply.
• Their total combined HSA contribution limit is therefore double the family HSA contribution limit: $8,550 to each HSA, or $17,100 total.

For more details: HSAs and Domestic Partners

Special Considerations for Children If an employee’s child is HSA-eligible and enrolled in family HSA coverage (e.g., as a dependent under the employee’s HDHP), both the employee and the child can each contribute the family HSA maximum to their respective HSAs.

However, a child is not HSA-eligible (i.e., eligible to establish and make or receive contributions to an HSA in the child’s name) if the child can be claimed as a dependent on the employee’s (or any other person’s) current-year tax return. This eliminates the possibility of child contributions to an HSA in many instances.

Example 6:

• Michael Dawson has HDHP coverage for himself and his 25-year old child Walt through his employer Linus & Associates.
• Walt cannot be claimed as a dependent on Michael’s (or anyone else’s) current-year tax return.

Result 6:

• Michael can contribute up to the family HSA limit ($8,550 in 2025) in his HSA because he is HSA-eligible and enrolled in family HDHP coverage.
• His son Walt can also contribute up to the family HSA limit ($8,550 in 2025) in his HSA because he is also HSA-eligible and enrolled in family HDHP coverage.

For more details: The HSA Eligibility Requirements

Employer HSA Contributions Most employers offering an HDHP will offer an employer HSA contribution amount and permit employees to contribute to the HSA pre-tax through payroll via the Section 125 cafeteria plan.

Aggregate Employer/Employee Contribution Limit Both employer and employee HSA contributions apply toward the statutory maximum contribution limit. Contributions from any source, including both employer and employee contributions through payroll, count toward the same aggregated limit.

In other words, the HSA contribution limit is different from the 401(k) contribution rules, which have separate deferral (§402(g)) and aggregate employer annual additions (§415(c)) contribution limits. No similar concept applies to HSA contributions—there is simply one unified annual HSA contribution limit.

Example 7:

• Kyle is HSA-eligible with family HDHP coverage for all of 2025.
• Kyle’s employer Big Time Bats contributes $3,000 to his HSA in 2025.

Result 7:

• Kyle can make additional contributions of up to $5,550 to his HSA in 2025 ($8,550 - $3,000).
• Any such additional contributions can be made by Kyle on a pre-tax basis through his employer’s Section 125 cafeteria plan, as a direct deposit into his HSA outside of payroll, or a combination thereof.

HSA Contribution Interval Set at Employer’s Discretion Employers may make one up-front lump sum contribution, semiannual contributions, quarterly contributions, monthly contributions, per-pay period contributions, or any other regular interval in between. The employer has full discretion in designing its HSA contribution strategy.

Form W-2 Reporting Employers must report all employer and employee HSA contributions made through payroll as a single aggregated amount on the employee’s Form W-2 in Box 12 using code W. This reporting includes the employer contribution amount and the amounts contributed by employees pre-tax through payroll (via the Section 125 cafeteria plan).

Example 8:

• Kyle is HSA-eligible with family HDHP coverage for all of 2025.
• Kyle’s employer Big Time Bats contributes $3,000 to his HSA in 2025.
• Kyle contributes $5,550 to his HSA on a pre-tax basis through his employer’s Section 125 cafeteria plan in 2025.

Result 8:

• The employer must report both the employer and employee HSA contributions as a single aggregated amount in Box 12 using Code W.
• Box 12 of Kyle’s 2025 Form W-2 will show $8,550 in combined employer/employee HSA contributions with Code W.

For more details:

• Employer HSA Contributions
• HSA Form W-2 Reporting

Catch-Up Contributions Individuals who are HSA eligible and age 55+ may contribute up to an additional $1,000 catch-up contribution to their HSA each calendar year. Individuals must turn age 55 by the end of the calendar year to qualify for the catch-up contribution.

Unlike the standard statutory annual limits that increase each year, this $1,000 annual catch-up contribution limit has been fixed by law at $1,000 since 2009 and will not adjust further for inflation.

Example 9:

• Anthony is enrolled in employee-only HDHP coverage through his employer Big Time Bats for the 2025 calendar plan year.
• His age 55 birthday is in October 2025.

Result 9:

• Anthony may contribute up to $5,300 to his HSA ($4,300 individual contribution limit + $1,000 catch-up contribution) in combined employer/employee contributions for 2025.
• He does not have to wait until his 55th birthday in October to begin making the catch-up contribution.

Catch-Up Contributions for Married Couples Each spouse may make an additional catch-up contribution of up to $1,000 if they are both HSA-eligible and are both age 55+ by the end of the calendar year.

Although the special HSA contribution rule for married individuals described above permits one spouse to contribute up the standard statutory family contribution limit in his or her HSA, the catch-up contribution rules are designed differently. The catch-up contribution rules require each spouse to make the catch-up contribution to his or her own HSA to take advantage of the double catch-up contribution. In other words, each spouse must make the catch-up contribution to their own HSA to take advantage of the catch-up contribution for both HSA-eligible and catch-up-eligible spouses. One spouse cannot contribute a $2,000 catch-up amount (or any amount more than $1,000) to his or her own HSA for this purpose.

Therefore, in a married relationship where only one spouse has established an HSA—which is common due to the special HSA contribution rules for married individuals—the other spouse would need to establish an HSA just to fund the $1,000 catch-up contribution. That is the only way to take advantage of the catch-up contribution available to both spouses.

Example 10:

• Anthony and his spouse Chelsea are both age 55+ by the end of 2025.
• Both Anthony and Chelsea are covered by a family HDHP through Anthony’s employer, and both are HSA-eligible for all of 2025.
• The couple wants to take advantage of the maximum standard statutory limit and catch-up HSA contribution amounts available for 2025.

Result 10:

• Anthony may contribute up to $9,550 to his HSA ($8,550 family contribution limit + $1,000 catch-up contribution).
• To take advantage of her catch-up contribution, Chelsea must establish her own HSA and contribute the $1,000 catch-up contribution to her HSA.
• The catch-up contribution available to Chelsea cannot be made to Anthony’s HSA (i.e., Anthony cannot make a $2,000 catch-up contribution to his HSA).

For more details: HSA Catch-Up Contributions

Stay tuned for The HSA Contribution Rules: Part II addressing the other contribution rules!

Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship. Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).