Is a high deductible health plan right for you?

Updated: January 4, 2021

What is a high deductible health plan?

A high deductible health plan (HDHP) is a plan that features higher deductibles than traditional insurance plans. High deductible health plans can be combined with a Health Savings Account (“HSA”) or a Health Reimbursement Account (“HRA”) to allow you to pay for qualified out-of-pocket medical expenses on a pre-tax basis.

When is a High Deductible Health Plan the right choice?

A health plan with a high deductible is an option for those who want very low premiums. High deductible health plans offer higher deductibles and lower premiums. The trade-off is that the health plan won’t pay any of your health care costs until you’ve met your deductible. For 2021, the minimum deductibles are $3,600 for an individual and $7,200 for a family.*

Are there other advantages to high deductible health plans?

If you choose a high deductible plan for health coverage and also put money in a Health Savings Account (HSA), you may save up enough money to cover your deductible. If you qualify, the funds contributed to the account aren’t subject to federal income tax at the time of deposit.

HSA funds must be used to pay for qualified medical expenses. Unlike a Flexible Spending Account (FSA), funds roll over year to year if you don’t spend them.

Also, most high deductible health plans have maximum out-of-pocket amounts that you pay every year. In 2021, that is $7,000 for an individual and $14,000 for a family.* Another advantage of ACA-compliant high deductible plans is that you and your family will still be eligible for free screenings, vaccines, counseling, and other covered preventive services to keep you healthy. This applies even if you haven’t met your yearly deductible.

Quartz can help you find the plan that fits your needs!