IRS Announces Changes to Health-Related Accounts for 2026 

The Internal Revenue Service announced on Thursday that it will increase the contribution limits for health-related spending accounts in 2026. The announcement came one day after the agency began furloughing employees because of the ongoing government shutdown.  

Starting in 2026, contribution limits for health flexible spending cafeteria plans will increase. Voluntary salary reductions are rising to $3,400, up $100 from the previous year. Furthermore, for cafeteria plans that allow carryover of unused funds, the maximum carryover amount will now be $680, an increase of $20. 

In addition, updates to medical savings accounts will also come into effect. For those with self-only coverage, the annual deductible will now range from $2,900 to $4,400, reflecting increases of $50 and $100, respectively. The maximum out-of-pocket expense for self-only coverage will rise to $5,850, an increase of $150.  

For family coverage under medical savings accounts, the annual deductible will begin at $5,850, up from $5,700, with a maximum limit of $8,750, representing a $200 increase. The out-of-pocket limit for family coverage will also rise to $10,700, reflecting a $200 increase from the previous year. These adjustments aim to provide more flexibility and financial relief for health care expenses as inflation continues to impact consumers. 

Medical savings accounts are similar to health savings accounts, which are used with high-deductible health plans, but MSAs are used with Medicare Advantage Plans. Money saved in an MSA can be used to pay Medicare-covered costs before a participant has met the plan’s deductible. 

The increases are the result of annual inflation adjustments. 

On Wednesday, the IRS furloughed nearly half of its staff as the government shutdown continued beyond one week. According to the updated contingency plan released that day, the IRS is expected to encounter significant operational challenges if the government stalemate persists for more than five business days from October 8. 

That slowdown could impair the update to retirement account contribution limits. In the last two years, the IRS announced the updates to retirement savings account limits close to November 1.