There are many kinds of healthcare plans out there, and finding one that works best for you can sometimes be difficult. One option is a high-deductible health plan, or HDHP. This kind of plan, combined with a health savings account, or HSA, can be a great option for many individuals. One of the most attractive aspects of HDHPs is how much more affordable they can be than other options. Read on to learn more about high-deductible health plans and how they work.

What Is an HDHP?

As we mentioned, HDHP stands for high-deductible health plan. But what does this mean, exactly? A high-deductible health plan is typically defined as a health insurance plan with a deductible of at least $1,400 for individuals and $2,800 for families. The out-of-pocket maximum cannot exceed $7,000 for individuals and $14,000 for families.

How Do I Enroll?

You can enroll in a high-deductible health plan through your employer or through government-sponsored exchanges during open enrollment. You can also apply outside of the open-enrollment period under certain circumstances.

What about an HSA?

When you’re researching high-deductible health plans, you’ll probably see the term HSA pop up. A health savings account is often included in an HDHP. HSAs allow you to save pretax money to use on medical expenses as you see fit. As long as you use these savings on qualified medical expenses, they remain untaxed. It’s worth keeping in mind that HSAs have maximum limits that you can deposit annually. As of 2021, this amount is $3,600 for individuals, $7,200 for families and an additional $1,000 per year if you’re over the age of 55.

Should I Use a High-Deductible Health Plan?

The choice of a health plan is a personal one, but there are plenty of reasons why an HDHP might be a good choice for you.

Here are a few:

• You’re healthy: If you have no health conditions and are relatively healthy, you might not feel the need for insurance that covers everything.
• You want to save money: HDHPs are highly affordable. This makes them an attractive option for families too.
• You want flexibility: An HDHP with an HSA affords you a lot of flexibility.

If any of these sound like you, you may want to consider finding an HDHP that works for you.

Read a similar article about HSA here at this page.