For 2024, the IRS defines a high-deductible health plan (HDHP) as one with a minimum annual deductible of $1,600 for self-only coverage or $3,200 for family coverage. The plan must also cap annual out-of-pocket expenses at no more than $8,050 for self-only coverage or $16,100 for family coverage. Both thresholds matter: a plan needs to meet the minimum deductible and stay under the out-of-pocket maximum to qualify.
2024 HDHP Thresholds at a Glance
- Minimum annual deductible (self-only): $1,600
- Minimum annual deductible (family): $3,200
- Maximum out-of-pocket expenses (self-only): $8,050
- Maximum out-of-pocket expenses (family): $16,100
Out-of-pocket expenses include deductibles, copayments, and coinsurance, but not premiums. If your plan’s deductible falls below the minimum or its out-of-pocket cap exceeds the maximum, it does not qualify as an HDHP for that year, even if it did in a prior year. The IRS adjusts these numbers annually for inflation, so the thresholds change from year to year.
Why HDHP Status Matters
The main reason people care whether their plan qualifies as an HDHP is the Health Savings Account. You can only contribute to an HSA if you’re enrolled in a qualifying HDHP and have no other disqualifying coverage. An HSA lets you set aside pre-tax money for medical expenses, and the funds roll over indefinitely, growing tax-free if invested. People 55 and older who aren’t enrolled in Medicare can contribute an extra $1,000 per year as a catch-up contribution.
If your plan doesn’t meet the IRS definition, any HSA contributions you make could be treated as excess contributions and hit with a 6% penalty tax for each year they remain in the account.
How Family Deductibles Work in an HDHP
Most HDHPs use what’s called an aggregate (or nonembedded) family deductible. That means there’s one single deductible for the entire family rather than separate deductibles for each family member. All family members’ medical costs count toward that shared number. Once the family deductible is met, the plan starts paying its share for everyone.
This is different from a typical non-HDHP plan, which often has an embedded deductible where each individual has their own deductible within the family plan. Under an aggregate structure, one family member could theoretically use up the entire family deductible on their own expenses. That’s worth knowing when you’re budgeting for a year with a planned surgery or ongoing treatment for one person in the household.
What an HDHP Can Cover Before the Deductible
The “high deductible” label doesn’t mean you pay full price for everything until you hit $1,600 or $3,200. The IRS allows HDHPs to cover certain preventive care services with no deductible at all. This includes routine screenings, immunizations, and annual physicals. A few specific items are also permitted before the deductible kicks in:
- Insulin and delivery devices: Insulin products and the devices used to administer them, regardless of whether they’re prescribed to treat existing diabetes or to prevent complications.
- Continuous glucose monitors: Monitors that measure glucose by piercing the skin qualify as preventive care under IRS rules.
- Breast cancer screening: Mammograms, MRIs, ultrasounds, and similar screening methods.
- Contraceptives: Over-the-counter oral contraceptives (including emergency contraception) and male condoms, whether purchased with a prescription or not.
Outside of preventive care, insulin, and telehealth or remote care services, an HDHP cannot cover anything before you meet the deductible. If your plan offers copays for doctor visits or prescription drugs before the deductible is satisfied, it likely doesn’t qualify as an HDHP for HSA purposes, even if the deductible itself is high enough.
How to Check Whether Your Plan Qualifies
Your plan’s Summary of Benefits and Coverage, which your insurer or employer is required to provide, lists both the annual deductible and the out-of-pocket maximum. Compare those numbers to the IRS thresholds above. If your employer offers the plan as “HSA-eligible” or “HDHP,” they’ve already confirmed it meets the requirements for the current year. When shopping on the health insurance marketplace, plans labeled as HSA-compatible will note that designation.
Keep in mind that a plan with a high deductible isn’t automatically an HDHP in the IRS sense. The plan also has to stay within the out-of-pocket maximum and avoid covering non-preventive services before the deductible. All three conditions must be met simultaneously for the plan to unlock HSA eligibility.