Glossary
High-deductible health plan
Also called HDHP
Definition
A high-deductible health plan (HDHP) is health coverage meeting IRS minimum deductible and maximum out-of-pocket rules, which makes the enrollee eligible to contribute to an HSA. Premiums are usually lower than traditional plans.
How high-deductible health plan works
The IRS sets the qualifying deductible and out-of-pocket figures each year.
Whether an HDHP plus HSA beats a traditional plan depends on expected medical use, employer HSA funding and tax rates.
Why it matters to a firm
Plan choice at open enrollment determines HSA eligibility; helping clients choose prevents errors.
Calculators that use high-deductible health plan
Questions about high-deductible health plan
Do I need an HDHP for an HSA?
Yes, plus no disqualifying other coverage.
Is an HDHP always cheaper?
Not for heavy medical users.
Who sets the rules?
The IRS, annually.
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Related terms: Health savings account
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