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Small Business Employee Benefits and HR Blog

FAQ: What is an HSA High Deductible Health Plan (HDHP)?

A high deductible health plan (HDHP) paired with a Health Savings Account (HSA) is growing in popularity. For example, HDHP plans have increased from 4 percent of all employer-sponsored health insurance plans in 2006 to 24 percent in 2015. To open an HSA, you must have an HDHP and meet other qualifying requirements (for background, see this article on HSA rules). When paired with a Small Business Health Reimbursement Arrangement (HRA), an HSA with an HDHP can be a powerful health tool. Here is a summary of the HDHP basics and guidelines, according to the IRS.hsa hdhp

HSA High Deductible Health Plan (HDHP) - The Basics

High-deductible health plans (HDHPs) provide insurance coverage.

An HDHP has:

  • A higher annual deductible than a typical health insurance plan

  • A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that an enrollee must pay for covered expenses. Out-of-pocket expenses include co-payments and other amounts, but do not include premiums

An HDHP may provide preventive care benefits without a deductible or with a deductible below the minimum annual deductible. Preventive care includes, but is not limited to, the following:

  1. Periodic health evaluations, including tests and diagnostic procedures ordered in connection with routine examinations, such as annual physicals
  2. Routine prenatal and well-child care
  3. Child and adult immunizations
  4. Tobacco cessation programs
  5. Obesity weight-loss programs
  6. Screening services (cancer, heart, mental health, pediatric, vision, etc.)

HSA High Deductible Health Plan (HDHP) - 2017 Guidelines

To be considered a HDHP (and to qualify for opening an HSA), the HDHP must meet the following minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2017.

 

Self-only coverage

Family coverage

Minimum annual deductible

$1,300

$2,600

Maximum annual deductible and other out-of-pocket expenses*

$6,550

$13,100

* This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies.

Self-only HDHP coverage is an HDHP covering only an eligible individual. Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual).

Click here to read IRS Guidelines, Rev. Proc. 2012-26.

Editor's Note: This post was originally published in September 2013.

Questions about HSA high-deductible health plans? Leave a comment below and we'll help answer them.

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