What Is a "High Deductible Health Plan" (HDHP)?

• Health insurance plan with minimum deductible of:
  - $1,000 (self-only coverage)
  - $2,000 (family coverage)
  - These amounts are indexed for inflation
• Annual out-of-pocket (including deductibles and co-pays) cannot exceed:
  - $5,000 (self-only coverage)
  - $10,000 (family coverage)
  - These amounts are indexed for inflation
  (Revised August 18, 2004)
• Reasonable benefit designs not counted toward the out of pocket maximum include:
  - Lifetime limits on benefits
  - Limits to usual, customary and reasonable (UCR) amounts
  - Limits on specific benefits
• Maximum number of days or visits covered
• Maximum dollar reimbursements
  - Pre-certification requirements
  ( Revised August 18, 2004 9)
• HDHPs can have:
  - first dollar coverage (no deductible) for preventive care
  - higher out-of-pocket (copays & coinsurance) for non-network services
  ( Revised August 18, 2004 10)
  

Conflicts with state benefit mandate

• State mandated first dollar coverage will result in plan losing status as HDHP - NJ requires first dollar coverage of any treatment of lead poisoning
• Transition relief for state mandates in place on January 1, 2004
  - Plans containing such mandates will not lose status as HDHP prior to January 1, 2006
  - After that date, plan will lose status as HDHP if such mandates remain in place
  ( Revised August 18, 2004 11)

Prescription Drugs

• HDHPs must apply costs of prescription drugs to the annual deductible or the individual may not contribute to an HSA
• Transition relief provided until January 1, 2006 if the individual is covered by a prescription drug benefit provided by a separate plan or rider from the HDHP
  (Revised August 18, 2004)

Preventive Care

• Safe harbor list of preventive care that HDHP can provide as first-dollar coverage before minimum deductible is satisfied:
  - Periodic health evaluations (e.g., annual physicals)
  - Screening services (e.g., mammograms)
  - Routine pre-natal and well-child care
  - Child and adult immunizations
  - Tobacco cessation programs
  - Obesity weight loss programs
• Can apply co-pays to preventive care services
  (Revised August 18, 2004)
• Preventive care generally does not include any service or benefit intended to treat an existing illness, injury or condition
• Certain drugs and medications can be considered preventive care.
  - Drugs taken by a person who has developed risk factors for a disease that has not yet manifested itself or to prevent reoccurrence of a disease
  - Example: Cholesterol-lowering medication for those with high cholesterol
  (Revised August 18, 2004)

Information as of 2004