The IRS has released the 2027 inflation-adjusted limit for excepted-benefit health reimbursement arrangements (EBHRAs) in Revenue Procedure 2026-24. The increase is small, but if you offer an EBHRA, it is worth updating your plan document and payroll before the 2027 plan year.
What is changing for 2027
| Limit | 2026 | 2027 |
|---|---|---|
| Maximum newly available per employee | $2,200 | $2,250 |
An EBHRA is a capped, employer-funded account that reimburses excepted benefits (such as dental and vision premiums), COBRA premiums, and short-term limited-duration insurance premiums. You can offer one alongside a traditional group health plan, and employees do not have to enroll in that plan to use the EBHRA. The most you can newly make available rises from $2,200 per employee in 2026 to $2,250 in 2027.
What employers should do
- Update your plan document. If your EBHRA document or your administrator sets the cap at the prior limit, raise it to no more than $2,250 for the 2027 plan year.
- Adjust your allowance. If you fund the maximum, you can increase the monthly or annual allowance to the new cap. Confirm the amount stays at or below $2,250.
- Keep it within the rules. The EBHRA can only reimburse excepted benefits, COBRA, and STLDI premiums, never individual major medical or group plan premiums other than COBRA. Exceeding the cap or reimbursing ineligible expenses can trigger a Section 4980D excise tax of $100 per day per affected individual.
For a full walkthrough of how an EBHRA works, see our Excepted Benefit HRA (EBHRA) page.
This is general educational information, not legal or tax advice. Confirm how these limits apply to your specific plan with your broker, carrier, or qualified advisor.