Hot Topics for HR This June

In 2026, Independence Day falls on Saturday, July 4th. Under Massachusetts law, holidays that fall on a Saturday are generally observed on the actual holiday. While employers are not required to provide paid holidays, many organizations that offer paid time off for Independence Day choose to observe the holiday on Friday, July 3, or provide a floating holiday instead.

IRS Releases 2027 HSA and HDHP Limits

The IRS has released the Health Savings Account (HSA) and High-Deductible Health Plan (HDHP) limits for 2027. Many employers were waiting for this announcement, which typically arrives in early May.

Beginning January 1, 2027:

• The HSA contribution limit for employees with individual coverage will increase to $4,500, up from $4,400 in 2026.
  The HSA contribution limit for employees with family coverage will increase to $9,000, up from $8,750 in 2026.

To qualify as a High-Deductible Health Plan in 2027:

• The minimum deductible will be $1,750 for individual coverage and $3,500 for family coverage.
• The maximum out-of-pocket expense limit will be $8,700 for individual coverage and $17,400 for family coverage.

The IRS also increased the limit for excepted-benefit Health Reimbursement Arrangements (HRAs) to $2,250 for 2027.

Why HSAs Continue to Grow in Popularity

HSAs remain a valuable benefit because they offer significant tax advantages. Contributions are made on a pre-tax basis, account earnings grow tax-free, and withdrawals used for qualified medical expenses are also tax-free. As healthcare costs continue to rise, more employees are using HSAs and contributing larger amounts. Recent data shows average HSA balances increased by 11% from 2024 to 2025.

The Importance of Employee Education

While employees are contributing more to their HSAs, many are using the accounts primarily for current medical expenses rather than as a long-term savings tool. Research shows that relatively few employees are saving HSA funds for retirement healthcare costs or investing their account balances. Benefits experts encourage employers to provide ongoing education about how HSAs work and how employees can maximize their value. Open enrollment is an excellent time to discuss HSA contributions, but HR professionals may want to begin those conversations well before enrollment season arrives.