High-deductible health plans (HDHP) are among the fastest growing health plans in both the individual and group markets. For calendar year 2017, the IRS defines a HDHP as any health plan with a minimum deductible of $1300 for individuals and $2600 for families. HDHPs generally do not provide coverage for services until after the enrollee spends down the deductible. However, under Section 2713 of the Public Health Service Act, private health plans may not impose patient cost-sharing requirements with respect to certain recommended preventative services. A 2013 notice from the IRS clarifies that a plan may therefore cover such services before an enrollee spends down his or her HDHP deductible without affecting the plan’s qualification as a HDHP for purposes relating to Health Savings Accounts (HSA). Notably, this preserves for HDHP enrollees the option of establishing a HSA, into which an individual or the individual’s employer is eligible to make tax-favored contributions and which can be accessed when paying for out-of-pocket medical expenditures.
Continue Reading The Road to Higher Out-of-Pocket Medical Costs is Paved with Good Intentions: The Unintended Consequences of High Deductible Health Plans.