What qualifies as a high-deductible health plan in 2024?
Asked by: Dr. Marta Cassin Jr. | Last update: August 5, 2025Score: 4.1/5 (57 votes)
What is a high deductible plan for 2024?
Plans will vary, but generally a minimum of $1,650 for individuals and $3,300 for families1. Will vary by plan and by employer, but generally are lower. Out-of-pocket limits are higher in an HDHP. For 2024, those limits are $8,050 for an individual plan, and $16,100 for a family plan.
What qualifies as an HSA eligible health plan in 2024?
HSA eligibility
For 2024, this means: It has an annual deductible of at least $1,600 for self-only coverage and $3,200 for family coverage. Its out-of-pocket maximum including annual deductible does not exceed $8,050 for self-only coverage and $16,100 for family coverage.
What is the criteria for a high-deductible health plan?
For 2025, the Internal Revenue Service (IRS) defines a high-deductible health plan as any plan with an annual deductible of at least $1,650 for an individual or $3,300 for a family. The maximum out-of-pocket expenses for an HDHP are $8,300 for an individual or $16,600 for a family.
What is the IRS limit for high-deductible health plan 2024?
If you had family HDHP coverage on the first day of the last month of your tax year, your contribution limit for 2024 is $8,300 even if you changed coverage during the year.
Why Your HDHP & HSA Are Better Than You Think
What does IRS consider high-deductible health plan?
For calendar year 2024, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,600 for self-only coverage or $3,200 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not ...
What are the HSA limits for 2024?
For 2024, the annual contribution limits on deductions for HSAs for individuals with self-only coverage is $4,150 (increase of $300) and $8,300 for family coverage (increase of $550). There is an additional contribution amount of $1,000 for taxpayers who are age 55 or older.
What is a high-deductible health plan example?
For example: If your monthly health insurance premium is $100, you'll pay $1,200 for the year. This amount doesn't count toward your deductible or out-of-pocket maximum. If your annual deductible is $3,000, you'll pay for most of the care you receive until you've reached this amount.
What is the 12 month rule for HSA?
It means you must remain eligible for the HSA until December 31 of the following year. The only exceptions are death or disability. If you violate the testing period requirement, your ineligible contributions become taxable income.
Who should not use a high-deductible health plan?
A chronic illness, such as heart disease or diabetes, can be much more expensive to manage under an HDHP than a traditional health care plan. With these conditions, regular medications and health screenings may be required. These costs may quickly add up until deductibles are finally met.
What is the downside of an HSA?
Drawbacks of HSAs include tax penalties for nonmedical expenses before age 65, and contributions made to the HSA within six months of applying for Social Security benefits may be subject to penalties. HSAs have fewer limitations and more tax advantages than flexible spending accounts (FSAs).
How do I know if my health plan qualifies for an HSA?
What's considered an HSA-eligible plan? Under the tax law, HSA-eligible plans must set a minimum deductible and a limit, or maximum, on out-of-pocket costs for both individuals and families. The minimum deductible is the amount you pay for health care items and services per year before your plan starts to pay.
Why choose a high-deductible health plan?
Pros. Lower monthly premiums: Most high-deductible health plans come with lower monthly premiums. If you anticipate only needing preventive care, which is covered at 100% under most plans when you stay in-network, then the lower premiums that often come with an HDHP may help you save money in the long run.
Is it better to have HDHP or PPO?
HDHPs can be a good form of insurance for the young and healthy — especially if your employer offers you HSA contributions. But for anyone with significant medical expenses, an upcoming surgery, or a serious health condition, a PPO could be a better fit because of the lower deductible.
Is there a deductible for Part D in 2024?
For 2025, under the standard benefit, Part D enrollees will pay a deductible of $590 (up from $545 in 2024), and will then pay 25% of their drug costs in the initial coverage phase until their out-of-pocket spending totals $2,000.
What happens if I contribute to an HSA without a HDHP?
There is no 20% penalty on excess contributions. If you no longer are enrolled in an HDHP you are not eligible to make contributions to your HSA, but you may request withdrawals for qualified medical expenses.
How do I know if I have a high-deductible health plan?
According to the Internal Revenue Service (IRS)1, in 2024, a high deductible health plan is any health plan that has a minimum deductible of $1,600 for individuals and $3,200 for families. In 2025, HDHPs have a minimum deductible of $1,650 and $3,300, respectively.
Are vitamins HSA-eligible?
In general, vitamins are not considered an HSA eligible expense unless they are prescribed by a doctor for a specific medical condition. For example, if your doctor prescribes prenatal vitamins during pregnancy or recommends vitamin D supplements to treat a deficiency, those could be eligible expenses under your HSA.
What is the last month rule for HSA 2024?
Here's the “Last Month” rule for HSA accounts, quoted directly from IRS Publication 969: “Under the last-month rule, you are considered to be an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers).
What is the minimum HDHP deductible for 2024?
HDHP Minimum Deductibles. The 2025 minimum annual deductible is $1,650 for self-only HDHP coverage (up from $1,600 in 2024) and $3,300 for family HDHP coverage (up from $3,200 in 2024). HDHP Out-of-Pocket Maximums.
How does the IRS define a high-deductible health plan?
An HDHP is health coverage with a: Higher annual deductible than typical health plans and. Maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that the taxpayer must pay for covered expenses. Out-of-pocket expenses include copayments and cost sharing but do not include premiums.
What is the main disadvantage of choosing a high deductible on an insurance policy?
The primary disadvantages of a high-deductible health plan include the high out-of-pocket costs and the potential reluctance to seek medical care due to upfront expenses. While HDHPs have lower premiums, individuals may face financial strain if they need medical services before meeting the deductible.
Can you use HSA for dental?
Your HSA also covers expenses for standard dental cleanings and dental check-ups. One thing to keep in mind is that some of these procedures may have a co-payment, so it's important that you check with your dental insurance provider to find out exactly what you'll have to pay out of pocket.
Should I max out my HSA every year?
If you're able to make the maximum contribution each year, then it's suggested that you do so. Some years you may need to use more of your HSA contributions than other years. Just remember, there's no yearly minimum you have to spend from your HSA and your entire HSA automatically rolls over each year.
Can I reimburse myself from HSA for previous years?
Can I use my HSA money to reimburse myself for qualified medical expenses from last year or before? Yes. As long as you incurred your qualified medical expense after you established your HSA, you can reimburse yourself for those expenses using your HSA money any time.