HDHP (High-Deductible Health Plan)

The IRS defines an HDHP by two numbers it adjusts each year: a minimum annual deductible and a maximum out-of-pocket limit, published alongside the HSA contribution limits in the annual revenue procedure (Rev. Proc. 2025-19 for 2026). A plan inside those bounds qualifies its enrollees to fund an HSA; a plan outside them, or any second plan that pays before the deductible, breaks eligibility.

The trade is straightforward: lower monthly premiums in exchange for paying more of your early-year care yourself. That math tends to favor an HDHP for people with low expected usage or enough cash cushion to absorb the deductible, especially once the HSA tax savings are counted, and to work against it for households with steady high medical costs. Pair the decision with an emergency fund that can cover the deductible, and size the tax side with the HSA calculator.