What is a High Deductible Health Plan (HDHP)?

A High Deductible Health Plan (HDHP) is an insurance plan with a higher deductible and lower premiums than other plans. With an HDHP you pay for all your healthcare costs until you’ve met your annual deductible. 

The main things to remember about HDHPs are:

• They have lower insurance premiums but a higher deductible than other insurance plans.

• They have a minimum deductible of $1350 for an individual plan and $2700 for a family plan for 2019.

• Once you meet the deductible your insurance plan will start to cover some of your healthcare costs.

• Once you meet the deductible you still need to pay copays and coinsurance.

• You might be used to paying small copays for prescription drugs or doctors visits. Be aware under HDHPs, you will cover the full cost of those services out-of-pocket until you have met the annual deductible.

• You aren’t required to have a dedicated Primary Care Physician (PCP).

• Because of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), telehealth services can be covered by an HDHP plan before you meet the deductible. This applies to plan years that start before 2022.

HDHPS can also be paired with certain tax-advantaged accounts:

• Some HDHPs are designed to be paired with a Health Savings Account (HSA). Others are paired with a Health Reimbursement Arrangement (HRA).

• HSAs and HRAs are tax-advantaged accounts you can use to pay for eligible out-of-pocket expenses.