Open enrollment on OPT, STEM OPT or H-1B: a 2027 checklist for international workers

What are the 2027 limits, and which taxes does each election avoid?

Every 2027 limit you need at open enrollment is published except the 401(k) and IRA limits. Health premiums, a payroll HSA, both FSAs and commuter benefits avoid federal income tax and FICA; a traditional 401(k) avoids income tax only.

The figures come from the IRS revenue procedures 2026-24 (HSA) and 2026-35 (FSA and commuter), and the tax treatment from Publication 15-B (2026). "Section 125" is the cafeteria plan that lets you pay for benefits with pre-tax pay. A payroll HSA here means one funded through that plan; HSA money taken from pay outside it counts as wages for Social Security and Medicare tax (Publication 15).

A Roth 401(k) avoids neither tax now; its benefit is a tax-free qualified payout later.

How do you compare the health plans?

Compare each plan by its yearly premiums plus the most you could pay for care, its out-of-pocket maximum. Premiums you pay through a Section 125 plan are free of federal income tax and FICA.

For 2027, a high-deductible health plan (HDHP) has a deductible of at least $1,750 for self-only cover or $3,500 for family cover. Its out-of-pocket costs, premiums aside, may not exceed $8,700 or $17,400; other ACA plans may go up to $12,000 or $24,000 in network. The HDHP or PPO guide works through the total yearly cost with examples.

1. Worst year: 12 months of premiums plus the out-of-pocket maximum.
2. Usual year: 12 months of premiums plus the care you expect.
3. For an HDHP, subtract what your employer puts into your HSA.

A J-1 exchange visitor needs cover with a deductible of at most $500 per accident or illness (22 CFR 62.14). The rule also requires $100,000 of medical benefits, $25,000 for repatriation and $50,000 for medical evacuation, and no HDHP can meet the deductible cap.

From January 1, 2027, F-1, J-1, H-1B and H-4 holders get no Marketplace premium tax credit (Marketplace subsidies end for visa holders). If your spouse will join you in 2027, read your plan's summary plan description and, if it allows, enroll them now.

Can you open an HSA on OPT or H-1B?

You can, if you are covered by an HDHP and meet the other eligibility rules: HSA eligibility has no citizenship, visa, residency or income test. For 2027 the limit is $4,500 with self-only cover or $9,000 with family cover, and your employer's deposits count toward it.

Publication 969 tests eligibility month by month: you must be covered by the HDHP on the first day of the month. You also need no other health cover that is not allowed: a general-purpose health FSA counts, a limited-purpose one does not. You must not be on Medicare or be someone else's dependent.

The HSA guide for H-1B and OPT covers eligibility, Form 8889 and leaving the US.

Payroll is the clearer route. Publication 15 says HSA contributions under a Section 125 plan are not wages and are free of employment taxes and withholding. Whether a nonresident alien can deduct money deposited outside payroll on Form 1040-NR is not settled in the IRS texts.

The account stays yours after you leave a job or the US. Money spent on anything but qualified medical costs is taxable, plus a 20% additional tax unless you are 65 or older or disabled.

If you join an HDHP mid-year and are eligible on December 1, the last-month rule lets you fund a full year. You must then stay eligible through December of the following year. Otherwise the extra is income plus a 10% additional tax.

How do you size a health FSA?

For plan years starting in 2027 you can set aside up to $3,500 in a health FSA, free of income tax and FICA. Money left at year end is generally lost, unless the plan has a carryover of up to $700 or a grace period of up to 2 1/2 months.

The whole year's election is yours from the first day of the plan year, whatever you have paid in so far. The IRS has also said a health FSA generally cannot pay for care after you stop participating, such as after your job ends, unless you continue it under COBRA.

The FSA guide covers layoffs and the dependent care FSA.

So elect what you are fairly sure to spend before your job or your stay could end. Publication 969 says you designate the amount at the start of each plan year, so set it again for 2027.

Is a dependent care FSA worth it with an H-4 or F-2 spouse?

A dependent care FSA usually gives a married worker nothing tax-free when the spouse has no earned income. The amount you exclude cannot be more than the lower of your earned income and your spouse's (IRC 129(b)).

An H-4 spouse without employment authorization, and an F-2 spouse, may not work, so they have no earned income from work.

Publication 503 has one exception. A spouse who is a full-time student, or unable to care for themselves, counts as earning $250 a month with one qualifying person. With two or more, such as two children under 13, it is $500.

Whether an F-2 spouse's study counts is not settled; ask a tax adviser.

The limit is $7,500 a year, or $3,750 for a married person filing separately. A married nonresident alien files Form 1040-NR as married filing separately, so $3,750 is the usual ceiling. If your H-4 spouse gets an EAD and starts work during 2027, your plan may let you change the election; ask HR.

Traditional or Roth 401(k), and how much?

The 2027 401(k) limit is not yet published; for 2026 you can defer up to $24,500, traditional and Roth together (Notice 2025-67). A traditional deferral avoids income tax now but never FICA, and a Roth deferral avoids neither now.

Unlike the Section 125 choices, your 401(k) election can change during the year as your plan allows. Watch the IRS COLA page for the 2027 figure. Before you choose, read three things:

1. The match formula: the match is paid only on what you defer.
2. The vesting schedule: how much of the match you keep if you leave early.
3. Your FICA status: if you pay FICA, a pre-tax premium, HSA or FSA dollar saves 7.65% more than a traditional 401(k) dollar at the same tax rate (1.45% more on pay above the wage base).

The 401(k) guide for OPT and H-1B covers vesting and your W-2. The IRA guide covers the $7,500 IRA limit for 2026, which most people can fund until Thursday, April 15, 2027. If you may leave the US, read early withdrawal costs and moving back to India with a 401(k) first.

Do life and disability insurance change your taxes?

Employer group-term life insurance is tax-free up to $50,000 of cover; the cost of cover above $50,000, less anything you pay toward it, is added to your wages. Publication 15-B (2026) puts that amount in W-2 boxes 1, 3 and 5 and in box 12 with code C.

Its own example: an employee aged 45 with $200,000 of cover who pays $100 a year. The extra $150,000 costs $0.15 x 150 x 12 = $270, and $270 minus $100 = $170 is added to their wages. If your pay is exempt from FICA, ask payroll how they treat that amount in boxes 3 and 5.

For disability cover, Publication 525 (2025) says that in most cases, premiums paid pre-tax through a cafeteria plan count as paid by your employer, so the benefits are taxable. If the premiums were included in your income, the benefits are not.

What does a commuter benefit save?

For 2027 you can pay up to $350 a month for transit passes and vanpools, and $350 a month for parking, free of federal income tax and FICA. That is up to $350 x 12 = $4,200 a year for each.

For a FICA-exempt OPT worker in the 22% bracket, a full year of transit saves $4,200 x 22% = $924. An H-1B worker in the same bracket also saves $4,200 x 7.65% = $321.30 of FICA, $1,245 in all (rounded).

What does each election save on OPT and on H-1B at the same pay?

At $100,000 a year in Texas and 2026 tax rates, each pre-tax health dollar saves an H-1B resident 7.65 cents more than a FICA-exempt OPT worker. A traditional 401(k) saves both the same, because 401(k) deferrals never avoid FICA.

At lower pay the order can flip. At $60,000 the same $2,400 of premiums saves Dana $528 but Lee only $472. Lee's standard deduction keeps their top dollars in the 12% band, so this holds only for a filer with no standard deduction.

In a state with an income tax the state saving comes on top. Try your own pay in the take-home calculator, and see how OPT and H-1B take-home pay compare.

Which states tax these elections anyway?

California, New Jersey and Pennsylvania tax some of these elections that federal law leaves out. Other states may differ too, so check yours before you count on a state saving.

When can you change your choices after open enrollment?

Premium, health FSA and dependent care FSA elections generally hold for the whole 2027 plan year. A plan may allow a change only after an event listed in the cafeteria plan rules, such as marriage, a birth or adoption, a change in employment, or a move.

HSA and 401(k) amounts can generally change during the year, for future paychecks. A health plan must give at least 30 days to enroll after marriage, a birth, an adoption or losing other cover (29 CFR 2590.701-6). The guide to adding a spouse or a new baby covers the windows for family.

If you lose your job, COBRA can keep the same plan for up to 18 months at up to 102% of its cost. It generally applies to employers with 20 or more employees. The Marketplace guide covers COBRA, the H-1B 60-day grace period and the gap after graduation.

What to do next

1. Find your employer's enrollment deadline in the portal or HR email. It is your employer's date, not a federal one.
2. Work out your 2027 FICA status from the table above. If 2027 is your first year as a resident alien and you are in the US on January 1, expect FICA from your first January paycheck.
3. Compare the health plans by premiums plus the out-of-pocket maximum. On a J-1, check the $500 deductible cap first.
4. If you choose an HDHP and an HSA, contribute through payroll (up to $4,500 or $9,000), and check whether a 2026 health FSA balance or grace period runs into 2027.
5. Set a health FSA amount sized to costs before your job or stay could end. If you are married, a dependent care FSA helps only if your spouse earns income, is a full-time student or cannot care for themselves.
6. Read your 401(k) match and vesting before you set your deferral. Raise it when the 2027 limit is out.
7. Check your first 2027 pay stub against your choices.

If you file your 2026 return as a nonresident alien student, F1TaxReturn prepares Form 1040-NR and Form 8843 for free once the IRS publishes the final 2026 forms. You print, sign and mail them; create an account when you are ready.