The 2027 HSA contribution limit is $4,500 for self-only coverage and $9,000 for family coverage, up from $4,400 and $8,750 in 2026. The 2027 FSA limit is projected at $3,500. If your employer’s open enrollment window is open now, the smartest move is to base your election on your actual 2026 medical spending — not last year’s guess — before you lock in a number for twelve months.
Why Open Enrollment Is the Wrong Time to Guess
Every fall, tens of millions of employees sit down with a benefits portal and pick a number for next year’s HSA or FSA contribution, often in under five minutes. That number then governs a full calendar year of paycheck deductions, and with an FSA, unused money above the small carryover limit is forfeited entirely at year-end.
The problem is that most people set their election based on a vague feeling (“I think I spent around $2,000 on medical stuff last year”) rather than actual data. If you tracked your medical, dental, vision, and prescription spending through the year, open enrollment becomes a five-minute math problem instead of a guess. If you did not, this is the moment to pull together whatever records you have — Explanation of Benefits statements, pharmacy receipts, credit card statements filtered by provider — before you submit your election.
2027 HSA and FSA Limits at a Glance
| Account | 2026 Limit | 2027 Limit | Change |
|---|---|---|---|
| HSA — self-only | $4,400 | $4,500 | +$100 |
| HSA — family | $8,750 | $9,000 | +$250 |
| HSA catch-up (55+) | $1,000 | $1,000 | No change |
| Health FSA (projected) | $3,400 | ~$3,500 | +$100 |
| FSA carryover (projected) | $680 | ~$700 | +$20 |
| Dependent Care FSA | $7,500 | $7,500 | No change |
The IRS typically finalizes the official health FSA number in the fall through a Revenue Procedure, so treat the $3,500 figure as a strong projection rather than a locked-in amount until your employer’s benefits portal confirms it.
HSA vs. FSA: Which One Actually Fits Your Situation
Health Savings Account (HSA)
An HSA is only available if you are enrolled in a High-Deductible Health Plan (HDHP). For 2027, that means a plan with a minimum deductible of $1,750 for self-only coverage or $3,500 for family coverage, and an out-of-pocket maximum capped at $8,700 self-only or $17,400 family. HSA funds roll over indefinitely, the account is portable if you change jobs, and after age 65 you can withdraw funds for non-medical reasons without penalty (though you will owe ordinary income tax, similar to a 401(k)).
Best for: People with a high-deductible plan, relatively predictable but not enormous medical costs, and an interest in treating unused HSA funds as a secondary retirement account.
Flexible Spending Account (FSA)
An FSA is available with most employer health plans, including traditional PPO and HMO plans, not just HDHPs. The tradeoff is the “use it or lose it” rule — you generally forfeit anything above the small carryover amount (projected ~$700 for 2027) at year-end, unless your employer offers a grace period instead.
Best for: People with predictable annual medical, dental, or vision expenses — recurring prescriptions, contact lenses, planned dental work — who want the tax break without needing an HDHP.
How to Calculate Your 2027 Election: Step by Step
Step 1: Pull your actual 2026 medical spending
Go through the last 8-9 months of the year and add up every medical, dental, vision, and prescription expense you paid out of pocket. Include copays, deductible payments, prescription costs, and any HSA/FSA-eligible items you bought at a pharmacy. If you have been logging these in a budgeting app under a medical category, this step takes minutes instead of an hour of statement-digging.
Step 2: Add known 2027 expenses that haven’t happened yet
Orthodontia starting in January, a planned surgery, a new baby’s well-checks, contact lens renewals — anything already on the calendar should be added on top of your historical baseline.
Step 3: Subtract anything that won’t recur
If 2026 included a one-time expense — an ER visit, a broken bone, a one-off specialist consult — strip that out unless you have reason to expect something similar in 2027. The goal is a realistic recurring baseline, not a worst-case number.
Step 4: Choose HSA or FSA based on your plan type
If you’re on an HDHP, default to maxing your HSA up to your comfort level before considering an FSA — HSA dollars never expire, so overestimating carries far less risk. If you’re on a traditional plan without HSA eligibility, size your FSA election conservatively; the forfeiture risk means it is better to slightly underfund than overfund.
Step 5: Round down slightly on the FSA side
Because unused FSA funds above the carryover are lost, err on the side of a slightly lower number than your calculated baseline — especially in the first year you’re doing this exercise. You can always pay eligible expenses out of pocket if you run short; you cannot get forfeited FSA money back.
Common Open Enrollment Mistakes
Mistake 1: Copying last year’s number without adjusting
Life changes — a new dependent, a new prescription, a move to a different metro area with different provider costs — but most people’s FSA election doesn’t. Revisit the number every year instead of auto-renewing.
Mistake 2: Forgetting the HSA triple tax advantage
HSA contributions are pre-tax (or tax-deductible if made outside payroll), grow tax-free, and come out tax-free for qualified medical expenses — a combination no other account offers, including a 401(k) or Roth IRA. If you’re eligible for an HSA and not contributing at least enough to cover predictable costs, you’re leaving a rare tax benefit on the table.
Mistake 3: Not accounting for dependent care separately
The Dependent Care FSA ($7,500 limit, unchanged for 2027) is a completely separate election from your health FSA or HSA. If you pay for daycare, after-school care, or elder care, that’s a distinct line item on your enrollment form — don’t let it get lost in the medical calculation.
Mistake 4: Ignoring employer HSA contributions when sizing your own
Some employers contribute directly to your HSA — commonly $500 to $1,500 a year. That employer contribution counts toward your $4,500/$9,000 annual limit, so check your benefits summary before setting your own payroll deduction, or you risk an excess-contribution penalty.
Mistake 5: Treating open enrollment as a once-a-year event with no follow-up
Setting the election is only half the job. If you don’t track spending against your HSA or FSA balance through the year, you won’t know until November whether you’re on pace to use your FSA funds or sitting on an HSA balance you could be investing instead of leaving in cash.
Why Spending Visibility Makes This Decision Easier
The single biggest lever in getting your 2027 election right isn’t a smarter formula — it’s better data on what you actually spent in 2026. People who track medical expenses as they happen throughout the year walk into open enrollment with a real number instead of a guess, and they tend to avoid both the FSA forfeiture trap and the HSA-underfunding trap.
Apps like Tefteri that let you tag spending by domain make this easier: instead of digging through a year of credit card statements every October, you can filter your personal spending down to a medical category in seconds and see exactly what you paid out of pocket. That’s the same discipline that helps with a broader mid-year money audit — the more consistently you track spending during the year, the less guessing you do at decision points like this one.
Tefteri is a personal finance app for iPhone that helps you track expenses, income, and subscriptions — organized by category, stored locally on your device, and designed to make financial clarity effortless.
Frequently Asked Questions
What is the 2027 HSA contribution limit?
The 2027 HSA contribution limit is $4,500 for self-only coverage and $9,000 for family coverage, an increase of $100 and $250 respectively over the 2026 limits. Those age 55 and older can contribute an additional $1,000 catch-up amount, bringing their totals to $5,500 and $10,000.
What is the 2027 FSA contribution limit?
The IRS typically finalizes health FSA limits in the fall, but the projected 2027 health FSA limit is approximately $3,500, up from $3,400 in 2026, based on the standard inflation-adjustment formula. Confirm the official number with your employer’s benefits portal once it’s published.
Can I have both an HSA and an FSA in 2027?
Generally no, with one exception: if you have an HSA-eligible HDHP, you can only pair it with a “limited-purpose FSA” that covers dental and vision expenses only, not general medical costs. A standard health FSA disqualifies you from HSA eligibility for that plan year.
What happens to unused FSA money at the end of the year?
Under standard IRS rules, you forfeit FSA funds above the carryover limit (projected around $700 for 2027) unless your employer instead offers a grace period of up to 2.5 extra months to spend the money. Check your plan documents, since not all employers offer the same rule, and some offer neither.
Does unused HSA money expire like FSA money does?
No. HSA balances roll over indefinitely with no expiration and no “use it or lose it” rule. The account is also fully portable if you change jobs or health plans, which is one of the main reasons financial planners often treat a well-funded HSA as a supplemental retirement account once immediate medical costs are covered.
