A high-deductible health plan (HDHP) has a higher deductible and lower premium than traditional plans. Enrolling in an HDHP qualifies you to open a Health Savings Account (HSA), which lets you contribute pre-tax dollars to pay for qualified medical expenses — a powerful tax triple-advantage.
A high-deductible health plan is defined by the IRS, not by insurance marketing. For 2024, a plan qualifies as an HDHP if the minimum deductible is at least $1,600 for self-only coverage ($3,200 for family), and the out-of-pocket maximum does not exceed $8,050 (self-only) or $16,100 (family). These thresholds adjust annually. IRS Revenue Procedure 2023-23 sets the official 2024 limits.
HDHPs trade a lower monthly premium for a higher deductible — you pay more out-of-pocket before insurance covers most costs. Preventive services required under the ACA (annual checkups, screenings, vaccines) must be covered at no cost even before the deductible is met. HDHPs can pair well with people who are generally healthy, have emergency savings, and want a lower premium.
If you are enrolled in a qualifying HDHP and not covered by any other non-HDHP health plan or Medicare, you can open an HSA. The triple tax advantage: (1) contributions are tax-deductible (or pre-tax if made through payroll); (2) the account grows tax-free; (3) withdrawals for qualified medical expenses are tax-free. For 2024, the IRS contribution limit is $4,150 for self-only and $8,300 for family coverage. Unused balances roll over — there is no 'use it or lose it' rule, unlike a Flexible Spending Account (FSA). IRS Publication 969 covers HSAs in detail.