What type of health plan is considered an HDHP?
A health plan is an HDHP if the plan satisfies the following annual deductible and out-of-pocket expense requirements for self-only or family coverage.
Self-only coverage: Annual deductible of at least $1,300 for 2017 and $1,350 for 2018. Also, an out-of-pocket expense (deductibles, co-payments, and other amounts, but not premiums) cap of $6,550 for 2017 and $6,650 for 2018.
Family coverage: Annual deductible of at least $2,600 for 2017 and $2,700 for 2018. Also, an out-of-pocket expense (deductibles, co-payments, and other amounts, but not premiums) cap of $13,100 for 2017 and $13,300 for 2018.
Family coverage with individual deductibles: In cases where family coverage has individual deductibles, the plan is considered an HDHP if no amounts are payable from the health plan until the family has incurred covered medical expenses in excess of the minimum annual deductible ($2,600 for 2017 and $2,700 for 2018), and the plan has an out-of-pocket expense cap of $13,100 for 2017 and $13,300 for 2018.
NOTE: These amounts may be increased for annual cost-of-living adjustments.
EXAMPLE: Which plan is considered an HDHP?
Plan A: Steve Johnson purchases health insurance for himself and his family for 2018. His plan has a $5,000 family deductible with a $1,000 individual deductible.
Plan B: Steve Johnson purchases health insurance for himself and his family for 2018. His plan has a $5,000 family deductible with a $2,700 individual deductible.
Answer: Plan A provides payment of covered medical expenses for any member of Steve’s family if the member has incurred covered medical expenses during the year in excess of $1,000, even if the family has not incurred covered medical expenses in excess of $2,700. Thus, benefits are potentially available under the plan even if the family’s covered medical expenses do not exceed $2,700. Because Plan A provides family coverage with an annual deductible of less than $2,700, the plan is not an HDHP.
Plan B satisfies the requirements for an HDHP because the plan only provides payment for covered medical expenses if any member of Steve’s family incurs covered medical expenses during the year in excess of $2,700.