Last Updated: October 21, 2026 Reading Time: 9 min

GEHA's HDHP deposits up to $2,000 a year into an account you keep forever, and most federal employees have never run the numbers. The HSA attached to FEHB high-deductible plans is the only triple-tax-advantaged account in the federal benefits stack, it comes with employer money through the premium pass-through, and it beats the Roth TSP on tax treatment for medical spending. It also has a trap at 65 that catches feds every year.

How the Pass-Through Turns a Premium Into Savings

Every FEHB high-deductible plan routes part of the premium you and the government already pay into your HSA. It arrives monthly, it's yours immediately, and it doesn't depend on you contributing anything.

The verified 2026 figures for the biggest player: GEHA HDHP deposits $1,000 a year for self-only enrollment and $2,000 for family. For 2027, OPM's plan-benefits data, revised October 15, 2026, keeps GEHA HDHP's deposit at $1,000 self-only and $2,000 for self plus one or family (an earlier version of the file showed $1,300 / $2,600), against an in-network deductible of $1,800 / $3,600 and an out-of-pocket maximum of $6,000 / $12,000. Aetna HealthFund HDHP deposits $800 / $1,600 with a $2,000 / $4,000 deductible. Those are FedTools readings of OPM's 2027 FEHB plan-benefits public use file; the exact amount for any plan is on the first pages of its brochure.

The pass-through counts against your IRS limit. A self-only GEHA HDHP enrollee can add $3,400 of their own money on top of the $1,000 deposit to reach the $4,400 cap in 2026. In 2027 a GEHA HDHP enrollee under 55 who is covered all twelve months has $3,500 of room self-only and $7,000 for self plus one or family ($4,500 / $9,000 minus the $1,000 / $2,000 deposit); add $1,000 at 55 or older.

The Triple Tax Advantage, Fed Edition

Money into an HSA through a pre-tax payroll allotment skips federal income tax and, unlike TSP contributions, skips FICA too (26 U.S.C. § 3121(a)(5)(G)). Contributions you deposit yourself and deduct at tax time avoid income tax but not FICA. For a full-year GEHA self-only enrollee under 55 in 2026, the $1,000 pass-through leaves $3,400 for personal contributions. Contributing that through pre-tax payroll saves about $260 ($3,400 × 7.65%) below the Social Security wage base. Above it, Medicare-tax savings depend on whether Additional Medicare Tax applies (26 U.S.C. § 3101(b)(2)), before the income-tax savings even start. Growth is untaxed. Withdrawals for qualified medical expenses are untaxed, at any age.

Compare the stack: traditional TSP is taxed on the way out, Roth TSP is taxed on the way in, and both pay FICA. The HSA pays tax at no point when spent on medical care. For the medical bills that virtually everyone eventually has, it is the best-treated dollar in the federal system.

The standard priority order for a fed with spare savings capacity: TSP up to the 5% match first (nothing beats a 100% match), then seriously consider maxing the HSA before adding unmatched TSP dollars.

The Worked Example: HDHP vs. a Standard Plan

The instinct that stops most people is "high deductible means I'll pay more." Run 2026 numbers for a healthy self-only GEHA enrollee choosing between GEHA Standard and GEHA HDHP:

  • The HDHP's premium is lower, and the plan deposits $1,000 into your HSA.
  • Net of 2026 premium savings and the 2026 pass-through, the HDHP enrollee comes out roughly $1,100 ahead in year one before any tax savings on their own contributions, and about $2,400 ahead for family enrollment. Those are 2026 numbers; re-run them with 2027 premiums in the calculator before you decide.
  • The trade, using 2027 cost sharing because that is the plan year you are choosing: GEHA HDHP's in-network deductible is $1,800 self-only / $3,600 family for 2027 (the 2027 deductible floor applicable to these FEHB HDHPs is $1,750 / $3,500), with the plan's in-network out-of-pocket maximum of $6,000 / $12,000 capping the downside, well under the IRS ceiling of $8,700 / $17,400.

A high-utilization year can flip the math, which is exactly the comparison our FEHB Calculator total-cost estimator is built for: it models premiums plus expected out-of-pocket costs by usage level, side by side.

The Medicare Trap at 65

This is the part that generates painful IRS letters.

Enrolling in any part of Medicare ends HSA eligibility. Contributions after enrollment are excess contributions with penalties attached. The nastier case is the lookback. If you claim Social Security after 65, Part A entitlement is backdated up to six months before the month you file (42 C.F.R. § 406.6(d)(4)), and the IRS applies the contribution bar to those retroactive months (Publication 969). Contributions made during that lookback window retroactively become excess.

The rule of thumb for feds working past 65: stop HSA contributions six months before you plan to claim Social Security or enroll in Medicare. You can keep the account and spend it forever; you just can't add to it. Pair this with the Part B decision itself, which we cover in Medicare Part B for 2027: The Premium Projection.

Who Can't Play

  • TRICARE enrollees. TRICARE is disqualifying coverage, full stop. Military retirees carrying TRICARE alongside FEHB cannot contribute, whichever FEHB plan they pick.
  • General-purpose FSA holders. A regular health care FSA (yours, or a spouse's that can also reimburse your medical expenses) makes you ineligible for every month it covers you. The limited-expense LEX FSA, which covers dental and vision only, is the compatible version FSAFEDS offers for exactly this reason. A Dependent Care FSA is not health coverage and has no effect on HSA eligibility.
  • VA care nuance. Care for a service-connected condition doesn't affect eligibility. Recent non-service-connected VA medical care can, for a rolling three-month window. Veterans using VA care should check this one carefully.

FSA vs HSA for Federal Employees

Feds get two tax-advantaged health accounts. A general-purpose Health Care FSA generally prevents new HSA contributions, while an HSA-eligible employee can fund an HSA alongside a Limited Expense HCFSA.

The FSAFEDS Health Care FSA is a one-year spending account. You can set aside up to $3,400 in 2026, spend it on any eligible medical, dental or vision expense, and, if the plan allows carryover, move at most $680 into the next year. The IRS had not announced the 2027 figure when this was updated. It needs no particular health plan, and it is funded from your pay alone; no FEHB plan puts money into it.

Contributing to an HSA requires qualifying high-deductible coverage and the other eligibility conditions, but you can keep and use an existing HSA after that eligibility ends. The limits are $4,400 self-only and $8,750 family in 2026, rising to $4,500 and $9,000 in 2027. The balance rolls over for as long as you live, it can be invested, and your FEHB plan funds part of it for you: $1,000 self-only or $2,000 self plus one or family for GEHA HDHP in 2027. The HSA door closes the month Medicare entitlement begins.

The two do not mix. A general-purpose Health Care FSA is "other coverage" under 26 U.S.C. § 223, and for every month it can reimburse your medical expenses your HSA contribution room is zero. If you move to an HDHP, FSAFEDS's Limited Expense HCFSA is the version built for you. It covers dental and vision only, which the tax code disregards for HSA eligibility, so you can hold it and still fund the HSA. The Dependent Care FSA, $7,500 per household in 2026 ($3,750 if married filing separately), is not health coverage and sits outside the rule; HDHP families can keep it.

A rule of thumb: predictable, modest medical spending on a traditional FEHB plan favors the Health Care FSA. An HSA-eligible employee choosing an HDHP can consider an HSA alongside a Limited Expense HCFSA, subject to FSAFEDS eligibility. Annuitants near Medicare should plan the contribution stop date first. Compare the plan side in the FEHB Calculator and the FSA side in the FSAFEDS deadline checklist.

Set It Up During Open Season

Open Season (November 9 to December 14, 2026) is when you can move into an HDHP for 2027. If you hold a general-purpose Health Care FSA today and are moving to an HDHP, elect the Limited Expense HCFSA for 2027 instead. If a 2026 Health Care FSA balance would carry over into 2027, ask FSAFEDS how that carryover affects your HSA eligibility before you elect; we could not verify that rule on fsafeds.gov for this update. Before then: compare your current plan against the HDHP options with the FEHB Calculator, check the pass-through amount in the brochure of any plan you're considering, and if you're within a few years of Medicare, sketch the contribution stop date now.

Calculate Your Plan Comparison

Use our free FEHB Calculator to compare HDHP premiums, government contributions, and estimated total annual costs against your current plan before Open Season locks your 2027 choice. Try it now →

Frequently Asked Questions

What are the 2026 HSA contribution limits?

Self-only coverage: $4,400. Family coverage: $8,750. Anyone who is 55 or older by year-end can add a $1,000 catch-up. The FEHB plan's premium pass-through counts against these limits, so subtract it to find your own contribution room. For 2027: $4,500 self-only, $9,000 family.

How much does the GEHA HDHP pass-through pay?

$1,000 a year for self-only and $2,000 for family enrollment in 2026, deposited from premiums into your HSA automatically. For 2027 OPM's revised plan-benefits file shows the same $1,000 self-only and $2,000 for self plus one or family.

Is the HSA better than the TSP?

They serve different jobs. Nothing beats the TSP match, so capture that first. After the match, HSA dollars get strictly better tax treatment than unmatched TSP dollars for anyone who will ever have medical expenses.

Why do feds lose HSA eligibility at 65?

Enrolling in any part of Medicare ends HSA contributions. Worse, claiming Social Security after 65 triggers automatic Part A enrollment backdated up to six months before the month you file, which can make prior HSA contributions excess contributions. Stop contributing at least six months before the month you file for Medicare or Social Security.

Can I have an FSA and an HSA?

Not a general-purpose health FSA, which blocks HSA contributions for every month it covers you. The limited-expense (LEX) FSA for dental and vision is the compatible option, and FSAFEDS offers it specifically for HDHP enrollees.

Can a federal employee have both an FSA and an HSA?

Only in certain combinations. A general-purpose FSAFEDS Health Care FSA counts as other health coverage and blocks HSA contributions for every month it covers you. The Limited Expense HCFSA (dental and vision only) is compatible with an HSA, and the Dependent Care FSA is not health coverage at all, so it never affects HSA eligibility.

FSA or HSA: which is better for a federal employee?

The HSA wins on tax treatment and permanence. The balance rolls over, it can be invested, your FEHB HDHP deposits money into it ($1,000 self-only / $2,000 self plus one or family for GEHA HDHP in 2027), and the 2027 limit is $4,500 / $9,000. Contribution eligibility requires qualifying HDHP coverage and stops beginning with the month Medicare entitlement starts; you keep the account and may spend its balance. The Health Care FSA ($3,400 in 2026, up to $680 carryover where the plan permits) suits feds who want a traditional plan and have predictable yearly expenses.

Sources: IRS Rev. Proc. 2025-19 and IRS Publication 969 · IRS Rev. Proc. 2026-24 (2027 HSA and HDHP amounts) · IRS IR-2025-103 and Rev. Proc. 2025-32 (2026 FSA limit) · 26 U.S.C. § 223 · 26 U.S.C. § 129 · 26 U.S.C. § 3121 · 42 C.F.R. § 406.6 · OPM HSA guidance · OPM 2027 FEHB Plan Benefits public use file (posted September 29, 2026) · GEHA 2026 HDHP plan brochure · IRS Notice 2004-50 (Medicare lookback) · FSAFEDS LEX FSA materials