As an alternative to traditional self-funded and managed care plans, more companies are considering implementing a high deductible health plan, known as an HDHP, alongside an HSA or HRA. The qualified HDHP was part of the bill signed into law in 2003 as part of the Medicare Modernization Act. Its purpose is to lower health care costs by pushing plan members to analyze their health care decisions, while making insurance premiums more affordable to everyone. An HSA or HRA would be used with the HDHP to help pay for the deductible costs.
What is the HDHP Deductible and Out-of-Pocket Maximum?
HDHP plan members have higher deductibles costs for their health care coverage, as the plan name suggests. The deductible is the amount of money a plan member must spend from his/her pocket before coverage kicks in. At least part of this deductible amount is covered by the HSA or HRA. As part of the legislation, there are minimum deductible limits set each year and adjusted for inflation, for a plan to qualify as an HDHP.
Deductible Minimum
- Individual: 2009 – $1,150; 2010- $1,200
- Family: 2009 – $2,300; 2010- $2,400
Out-of-Pocket Maximum
- Individual: 2009 – $5,800; 2010- $5,950
- Family: 2009 – $11,600; 2010- $11,900
The annual out-of-pocket maximum is the maximum amount of money the member pays before medical services are provided at no cost. The annual out-of-pocket maximum includes deductibles and coinsurance payments. Not included in the out-of-pocket maximum are lifetime maximum benefits, usual, customary and reasonable (UCR) amounts, existing benefit limits and pre-certification requirements. Like the HDHP deductible minimum, the out-of-pocket maximum is adjusted each year for inflation.
As a HDHP participant you are entitled to hold a Health Savings Account. This is a tax benefitted account that accumulates as deposits are made. The policy holder is allowed to withdraw the money from the HSA to pay for the HDHP deductible and allowable medical expenses. Better yet, most plans now allow a premium pass through so a portion of the monthly premium payment goes into the HSA directly. For 2010, the maximum limit on yearly deposits is $3,050 individual and $6,000 family.
Click here for an HSA calculator: http://www.msainfo.net/worksheet.html