What is a qualified, high-deductible health plan (HDHP)?
A health plan designed to give you more control of your health care spending by offering lower monthly premiums in exchange for higher deductibles and out-of-pocket maximum limits. This type of plan generally eliminates copayments. Instead, you pay the full cost for medical expenses like doctor visits, emergency care, and prescriptions – until a certain dollar limit (typically the deductible and/or out-of-pocket maximum) is reached. Once you reach this limit, benefits become available under the plan.
Per section 223 of the Internal Revenue Code a qualified high-deductible health plan is as follows: For a self-only plan an HDHP must have an annual deductible of at least $1000 and an annual maximum out of pocket no more than $5000. For a family an HDHP plan must have an annual deductible of at least $2000 and an annual maximum out of pocket of no more than $10,000. In order for a health insurance plan to be a qualified HDHP, the health insurance plan cannot pay one penny until the above minimum annual deductible is met. It can’t pay copays, percentages, or prescriptions until you have met the minimum annual deductible above.
Related Questions
- Can an individual who is not covered by a high-deductible health plan HDHP for the whole year contribute the maximum annual limit established by the IRS?
- How do I know if my health plan is a "qualifying (or qualified)" high-deductible health plan (HDHP)?
- What is a qualified, high-deductible health plan (HDHP)?
