Keenan Briefings

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Briefing

Updated 2027 Benefit Limits For Health & Welfare Plans

November 10, 2026

Every year, the U.S. Government sets new limits for various benefit programs to reflect inflation and changes in the law. Following are the limits announced or projected for 2027. Items denoted with an asterisk (*) are projected and will be updated when the official limit is announced. Employers should review their benefit plans to ensure they reflect these new limits.

Retirement Plans

2026

2027

Limits on Benefits and Contributions:
• Defined benefit plan, basic limit
• Defined contribution plan, basic limit
• 401(k) and 403(b) plans, elective deferrals
• 457(b) plans, elective deferrals
• SIMPLE plans, elective deferrals
• Annual compensation limit


$290,000
$72,000
$24,500
$24,500
$17,000
$360,000


$300,000*
$75,000*
$25,500*
$25,500*
$17,500*
$375,000*

Catch-Up Contributions
• 401(k), 403(b) or governmental 457 plans
• SIMPLE plans


$8,000
$4,000


$8,500*
$4,000*

Catch-Up Contributions (Ages 60 to 63)
• 401(k), 403(b), or governmental 457 plans
• SIMPLE plans


$11,250
$5,250


$11,750*
$5,250*

"Highly Compensated" Definition

$160,000

$170,000*

"Officer" Or "Key Employee" Definition

$235,000

$245,000*

Health Savings Accounts

2026

2027

Contributions:
• Individual
• Family


$4,400
$8,750


$4,500
$9,000

Minimum Annual Deductible:
• Self-Only
• Family


$1,700
$3,400


$1,750
$3,500

Out-of-Pocket Maximums (OOPM):
• Self-Only
• Family


$8,500
$16,600


$8,700
$17,400

Post-55 Catch-Up Limit

$1,000

$1,000

Non-HSA Qualified Plans

2026

2027

Out-of-Pocket Maximums (OOPM)
• Self-Only
• Other than self-only coverage


$10,600
$21,200


$12,000
$24,000

Medicare

2026

2027

Part A (Hospital Insurance):
• Inpatient deductible
• Daily Coinsurance, Days 61-90
• Daily Coinsurance, Days 91-150 (Lifetime Reserve)
• Daily Coinsurance, Skilled Nursing Facility
For days 21-100. Days 1-20 is $0 for each benefit period.


$1,736
$434
$868
$217.00


$1,788*
$447*
$894*
$224*

Part B (Supplementary Medical Insurance):
• Monthly premium
• Deductible


$206.50
$283


$209.50*
$292-$310*

Part D (Prescription Drug Benefit):
• Base Part D Premium
• Maximum Annual Deductible
• Annual Out-Of-Pocket Threshold


$38.99
$615
$2,100


$41.33
$700
$2,400

Medical Savings Accounts

2026

2027

Individual Deductible Range
Individual Out-Of-Pocket Maximum
Family Deductible Range
Family Out-Of-Pocket Maximum

$2,900 - $4,400
$5,850
$5,850 - $8,750
$10,700

$3,000 - $4,500
$6,050
$6,050 - $9,050
$11,050

Long Term Care Insurance Deductible Premiums

2026

2027

Age:
• 40 or less
• 41-50
• 51-60
• 61-70
• Over 70


$500
$930
$1,860
$4,960
$6,200


$500
$945
$1,890
$5,030
$6,290

Flexible Spending Accounts

2026

2027

Dependent Care
Medical

$7,500
$3,400

$7,500
$3,500

Medical FSA Carryover Limit

$680

$700

Employer Adoption Assistance

2026

2027

Maximum Gross Income Exclusion

$17,670

$18,250

Maximum AGI Limit

$265,080

$273,680

Qualified Transportation Fringe Benefit

2026

2027

Parking
Transit Pass/ Commuter Vehicle

$340
$340

$350
$350

Control Employee Definition for Commuting Valuation

2026

2027

Officer Compensation
Employee Compensation

$130,000
$265,000

$135,000
$275,000

Affordable Care Act (ACA)

2026

2027

4980H(a) Penalty

$3,340

$3,780

4980H(b) Penalty

$5,010

$5,670

FPL Affordability Safe Harbors
• FPL for Single individual
• Maximum monthly contribution


$15,650
$129.89


$15,960
$135.93

Affordability
• Affordability threshold under 4980H affordability safe harbors
• Affordability threshold for eligibility of premium tax credits


9.96%
9.96%


10.22%
10.22%

PCORI Fee (per covered life)

$3.84
For plan years ending on or after October 1, 2025 and before December 31, 2025.

$4.04*

San Francisco Health Care Expenditure Rate Increase

The San Francisco Health Care Security Ordinance (HCSO) has released the updated minimum health care expenditure rates for 2027, requiring employers with San Francisco-based employees to comply with these new standards. Employers must spend a specified amount on health care for each covered employee, and only certain expenditures such as payments for health services, insurance premiums, and self-insured plans for employees and their dependents count toward the requirement. After premium rates for fully insured plans are set, plan sponsors should review and address any shortfalls to meet the minimum expenditure rate for each employee. Following are the current and upcoming health care expenditure hourly rates:

Employer Size
(All workers globally)

Minimum Expenditure Rate by Calendar Year (Per hour that employee is entitled to be paid)

2026

2027

20-99 employees (or nonprofits with 50-99 employees)

$2.74

$2.99

100 or more employees

$4.11

$4.49

Exemption Threshold: Managerial, supervisory, and confidential employees who earn more than $131,763 per year (or $63.35 per hour) are exempt.

[1] For days 21-100. Days 1-20 is $0 for each benefit period.

[2] Use 2026 poverty guidelines to determine affordability.

[3] For plan years ending on or after October 1, 2025 and before December 31, 2025.

Keenan is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities, and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.

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