High-Deductible Health Plan (HDHP)

A high-deductible health plan (HDHP) has a higher deductible than most health plans, but it also has a lower monthly premium. The deductible is the amount you must pay yourself before your health plan pays its part for health care services. A premium is the amount you pay every month for your health plan. That means with an HDHP, you generally pay a smaller premium, but when you need health care, you pay more out of pocket before you get help covering your medical costs from the insurance company.

You can combine an HDHP with a health savings account (HSA). If you have employer-based health insurance, you may be eligible to combine your HDHP with a HSA or with a health reimbursement arrangement (HRA). With an HSA, you contribute pre-tax money to pay for health costs not covered by insurance, such as copays, coinsurance, or dental care. Your employer may also add to your HSA. Not all high-deductible plans can be used with a HSA. An HRA is similar to a HSA except the employer funds the account, not the employee.

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