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High deductible health plan (HDHP)

Last Updated March 20, 2009

Definition

A high deductible health plan (HDHP) is a health plan that has an annual deductible which is not less than a certain amount for self-coverage and family coverage. The amount for family coverage is usually twice the dollar amount that applies for self-coverage.

The sum off the annual deductible and other annual out-of-pocket expenses required to be paid under the plan (other than for premiums) for covered benefits does not exceed a certain amount. Again, the amount for family coverage is usually twice the dollar amount that applies for self-coverage. For instance, the current limits are :

  • For calendar year 2007, the annual deductible is not less than $1,100 for self-only coverage or $2,200 for family coverage, and the annual out-of pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $5,500 for self-only coverage or $11,000 for family coverage.
  • For calendar year 2008, the annual deductible is not less than $1,100 for self-only coverage or $2,200 for family coverage, and the annual out-of pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $5,600 for self-only coverage or $11,200 for family coverage

 

Referring Cite

IRC § 223(c)(2)(A).

Additional Helpful Information

Exclusion of certain plans

  • An HDHP does not include a plan if substantially all of the coverage is for accidents, disability, dental care, vision care, or long-term care.
  • An HDHP also cannot be insurance that you are permitted to have in addition to an HDHP.

Safe harbor for absence of preventive care deductible

  • A plan shall not fail to be treated as a high deductible health plan by reason of failing to have a deductible for preventive care (within the meaning of section 1871 of the Social Security Act, except as otherwise provided by the Secretary).

Special rules for network plans


In the case of a plan using a network of providers—

  •  
    • Annual out-of-pocket limitation: Such plan shall not fail to be treated as a high deductible health plan by reason of having an out-of-pocket limitation for services provided outside of such network which exceeds the applicable limitation in effect for the year
    • Annual deductible: Such plan’s annual deductible for services provided outside of such network shall not be taken into account for purposes of the monthly limitation in effect