HDHP (High-Deductible Health Plan)
A health insurance plan with lower premiums but a higher deductible than traditional plans, and the only plan type that makes you eligible for an HSA.
Last reviewed August 23, 2026
Definition
A High-Deductible Health Plan (HDHP) is a health insurance plan with higher deductibles and lower premiums than traditional PPO or HMO plans. HDHPs are the only plan type that qualifies you to open and contribute to a Health Savings Account (HSA).
IRS thresholds for 2026: a plan qualifies as an HDHP if the annual deductible is at least $1,700 for self-only coverage or $3,400 for family coverage, and annual out-of-pocket expenses do not exceed $8,500 for self-only or $17,000 for family. Source: IRS Revenue Procedure 2025-19. These change annually.
How an HDHP and an HSA fit together: Only an HDHP makes you eligible to contribute to an HSA. The premium is lower and the deductible is higher, so more of the first-dollar cost sits with you, and HSA money can be used against it before tax.
What the trade turns on: the premium difference over twelve months, the deductible and out-of-pocket maximum, how much care your household actually used last year, and whether you could absorb the full deductible if a major event landed in month one. Those first three are on the plan documents. The fourth only you can answer, and your benefits team or a licensed agent can walk you through the rest.
Pairing an HDHP with an HSA is the reason most people encounter one. HSA vs. FSA covers how that pairing works.
Examples
An HDHP costs less per month in premiums than a PPO. Put the difference into an HSA and, in a year with little care, it stays there. In a year with a lot of care, it goes against a higher deductible.
Your HDHP has a $2,000 individual deductible. A $4,000 appendectomy means you pay the $2,000 deductible from your HSA (tax-free), then 20% coinsurance on the remaining $2,000, capped by your out-of-pocket maximum.
HSA balances roll over year to year, so an account contributed to over a long period is not reset by an unused year, unlike an FSA.
Frequently asked questions
What should I check before choosing an HDHP?
The deductible is the number that matters: on an HDHP you pay it in full before most coverage starts, so it's worth knowing whether you could cover it from savings if something unexpected happened. Your plan documents state the exact figure, and your benefits team can walk through how it interacts with an HSA.
Can I use an HSA to pay my HDHP deductible?
Yes. HSA funds can be used for any qualified medical expense, including payments toward your HDHP deductible. This is the core of the HDHP + HSA strategy.
Do preventive services cost anything on an HDHP?
On ACA-compliant plans, preventive services (annual physical, preventive screenings, immunizations) are covered at no cost even before meeting the deductible, the same as traditional plans.
Related terms
Open enrollment
The annual period during which employees can enroll in, change, or cancel employer-sponsored benefits.
HSA (Health Savings Account)
A tax-advantaged account that lets you save pre-tax money for qualified medical expenses, available with high-deductible health plans.
Deductible
The amount you pay out of pocket for covered services before your insurance begins to pay.
Out-of-pocket maximum
The most you'll ever pay in a plan year for covered services, after which your insurance pays 100%.
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