High-Deductible Health Plan (HDHP)

A high-deductible health plan (HDHP) is a health plan that meets IRS rules for a minimum annual deductible and a maximum on annual out-of-pocket costs. Employees enrolled in one may be eligible to contribute to a health savings account (HSA).

A large deductible alone does not make a plan an HDHP. The plan must meet the IRS definition, and an employee also needs to avoid disqualifying coverage before an HSA is allowed.

What Makes a Plan an HDHP in 2026?

For 2026, the IRS defines an HDHP as a plan with an annual deductible of at least $1,700 for self-only coverage or $3,400 for family coverage. Annual out-of-pocket expenses may not exceed $8,500 for self-only or $17,000 for family coverage.

Out-of-pocket expenses include deductibles, copayments and other amounts, but not premiums. The IRS lists these figures in Publication 969. The IRS has also published 2027 amounts of $1,750 and $3,500 for the minimum deductible, and $8,700 and $17,400 for the out-of-pocket maximum.

What Can an HDHP Cover Before the Deductible?

An HDHP may provide preventive care without a deductible. Examples listed by the IRS include immunizations, screenings and tobacco cessation programs. IRS Notice 2024-75 also added over-the-counter oral contraceptives and male condoms to the list.

Telehealth is the other exception. The One Big Beautiful Bill Act made permanent the rule that a plan can cover telehealth and other remote care without a deductible, for plan years beginning after December 31, 2024. IRS Notice 2026-5 says this does not extend to in-person services, medical equipment or drugs furnished in connection with a remote visit.

Pre-deductible coverage beyond these exceptions can cost the plan its HDHP status. Employers should check each benefit design with their carrier or benefits adviser.

What Design Choices Do Employers Have?

Employers choose deductibles and out-of-pocket limits within the IRS ranges. In a family plan with both an individual and a family deductible, the plan fails the test if either deductible is below the family minimum. In 2026, that means an embedded individual deductible must be at least $3,400.

For a plan that uses a provider network, the out-of-pocket limit does not apply to out-of-network deductibles and expenses. Only in-network amounts count toward the limit. Plans whose coverage consists substantially of permitted extras, such as dental or vision, are not HDHPs.

Employers that use an individual coverage health reimbursement arrangement (ICHRA) have another route. An ICHRA may be used to buy a bronze or catastrophic individual plan, and Notice 2026-5 treats those plans as HDHPs.

How Is an HDHP Different From an HSA?

An HDHP is the health plan, and an HSA is the savings account that can sit beside it. The HDHP decides how much an employee pays before the plan shares costs, while the HSA holds money for qualified medical expenses.

An employee generally needs HDHP coverage to open and contribute to an HSA. The reverse is not true, since an employee can be in an HDHP and never open an account.

Does an HDHP Make an Employee HSA-Eligible?

Not by itself. A person with HDHP coverage generally cannot have any other health coverage. The IRS permits some additional coverage, such as dental, vision, accident, disability, long-term care, specific disease coverage and telehealth.

A change took effect in 2026. Bronze and catastrophic plans available as individual coverage through an Exchange are treated as HDHPs for months beginning after December 31, 2025, even if they do not meet the deductible and out-of-pocket tests. Small business SHOP bronze plans generally do not qualify under that rule. The HSA entry covers contribution limits and tax treatment.

How Does HR Cloud Fit Into High-Deductible Health Plans?

HR Cloud's People HRIS page describes employee profiles, secure document storage and a mobile app where employees see their own record and company announcements. HR Cloud's onboarding page describes sending forms and collecting signatures digitally.

The pages do not describe benefits administration, plan enrollment, HDHP qualification checks or HSA eligibility. Your carrier or benefits administrator handles plan design and enrollment, and HR must confirm eligibility rules itself. HR Cloud is not a legal advisor and does not ensure compliance.

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Frequently Asked Questions

Q: What is the minimum HDHP deductible for 2026?

A: $1,700 for self-only coverage and $3,400 for family coverage.

Q: What is the 2026 out-of-pocket maximum for an HDHP?

A: $8,500 for self-only coverage and $17,000 for family coverage. Premiums do not count toward it.

Q: Can an HDHP cover preventive care before the deductible?

A: Yes. Preventive care can be covered without a deductible, and the IRS publishes examples of what counts.

Q: Can an HDHP cover telehealth before the deductible?

A: Yes, for remote services. This safe harbor is permanent for plan years beginning after December 31, 2024, but it does not cover in-person care, equipment or drugs.

Q: Are bronze plans HDHPs?

A: Starting with months after December 31, 2025, bronze and catastrophic plans available as individual coverage through an Exchange are treated as HDHPs. SHOP bronze plans generally are not.

Q: Do HDHP limits change every year?

A: Yes, the IRS adjusts them for inflation each year. Confirm the current figures before setting plan design.