What Qualifies as a High Deductible Health Plan?
Discover the specific financial thresholds and design rules that define a High Deductible Health Plan (HDHP).
A High Deductible Health Plan (HDHP) is a type of health insurance coverage with a specific financial structure. These plans feature lower monthly premiums in exchange for higher deductibles, meaning individuals pay more out-of-pocket for medical services before their insurance coverage begins to contribute. The primary purpose of an HDHP, as defined by the Internal Revenue Service (IRS), is to qualify individuals for eligibility to open and contribute to a Health Savings Account (HSA). This unique design encourages consumers to be more mindful of their healthcare spending, as they bear more of the initial costs themselves.
Deductible Thresholds
To qualify as an HDHP, a health plan must meet specific minimum annual deductible amounts set by the IRS. A deductible is the amount an individual must pay for covered healthcare services before their insurance plan starts to pay. For the calendar year 2025, the minimum annual deductible for self-only HDHP coverage is $1,650. For those with family HDHP coverage, the minimum annual deductible is $3,300.
The IRS periodically adjusts these amounts to account for inflation and other economic factors. Individuals considering an HDHP should verify the current year’s IRS-mandated minimum deductibles, as these figures change annually.
Out-of-Pocket Spending Limits
Beyond the deductible, an HDHP must also adhere to specific maximum annual out-of-pocket spending limits. The out-of-pocket maximum represents the most an individual or family will have to pay for covered medical expenses within a plan year, after which the health plan typically covers 100% of additional eligible costs.
For 2025, the maximum out-of-pocket expense for self-only HDHP coverage is $8,300. For family HDHP coverage, this limit is $16,600. These out-of-pocket maximums include amounts paid for deductibles, copayments, and coinsurance. However, they do not include premiums paid for the insurance coverage itself. These limits provide a financial safeguard, ensuring that even with a high deductible, there is a cap on the total amount an individual or family might spend on medical care in a year.
Additional Plan Design Elements
HDHPs include other design elements beyond meeting deductible and out-of-pocket maximums. Generally, an HDHP cannot provide benefits for any services, other than preventive care, before the minimum deductible is met.
An important exception to the deductible requirement is preventive care services. HDHPs are permitted to cover preventive care at 100% without requiring the deductible to be met, or with a deductible lower than the annual minimum.
Preventive care typically includes routine physicals, screenings, immunizations, and certain behavioral counseling services, but generally excludes services intended to treat an existing illness or injury. The IRS periodically expands the list of what qualifies as preventive care, which can include certain contraceptives, specific breast cancer screenings, continuous glucose monitors, and some insulin products. Most prescription drug costs are subject to the deductible, though some preventive medications may be covered pre-deductible under IRS guidance.