Summary

Looking for a cost-effective benefits solution? Learn the facts and myths about offering an HDHP for employers and how it can help you save on premiums and attract top talent.

As open enrollment approaches, employers have a prime opportunity to review their benefits strategy. A well-designed benefits package not only attracts top talent but also helps retain your current workforce.

High-Deductible Health Plans (HDHPs) are a common offering that provides a cost-effective solution for both your company and your employees.

However, many employers and employees have misconceptions about these plans. By understanding the core benefits of HDHPs and how they integrate with Health Savings Accounts (HSAs), you can offer a flexible and valuable option that supports your business goals and your team’s needs.

3 Key Financial Advantages of HDHPs for Employers

HDHPs are more than just a low-cost option; they are a strategic choice that offers significant financial and administrative advantages for your organization.

Lower Premiums
By nature, HDHPs come with lower monthly premiums compared to traditional plans. This directly translates to reduced healthcare costs for your business, freeing up capital that can be reinvested into other areas.

Encourage Employee Engagement
When employees are more directly involved in their healthcare spending, they often become more proactive in managing their health and seeking out more cost-effective care. This can lead to healthier habits and lower long-term costs for the entire group.

Attract and Retain Talent
The ability to contribute to an HSA is a highly attractive benefit for employees. An HDHP combined with an HSA offers a unique combination of financial control and long-term savings, making your benefits package more competitive in the market.

2026 HDHP & HSA Limits: A Guide for Employers

Staying informed about the latest IRS regulations is essential for managing your benefits program effectively. Here are the updated limits for 2026:

HDHP Limits

• Individual: Minimum Deductible: $1,700 | Maximum Out-of-Pocket: $8,500
• Family: Minimum Deductible: $3,400 | Maximum Out-of-Pocket: $17,000

HSA Contribution Limits

• Individual Coverage: $4,400
• Family Coverage: $8,750
• Catch-up Contribution (age 55+): $1,000

These increases provide a greater opportunity for both you and your employees to contribute to a tax-advantaged account.

5 Facts and 5 Myths for Employers to Know

Understanding how HDHPs work in practice is crucial for communicating their value to your team. Here are five key facts and five common myths to help you prepare for open enrollment.

5 HDHP Facts

1. Lower Premiums Mean Lower Costs: The most direct benefit for your bottom line is the lower monthly premiums, which can significantly reduce your company’s overall healthcare expenses.
2. Preventive Care Is Covered: A qualifying HDHP must cover preventive services at no cost to the employee, regardless of whether they have met their deductible.
3. HSAs Offer Triple Tax Savings: Your contributions to an employee’s HSA are tax-deductible, and the funds grow and can be withdrawn tax-free for qualified medical expenses.
4. You Can Contribute to HSAs: Employer contributions to an employee’s HSA are a powerful way to enhance your benefits package. These contributions help employees manage out-of-pocket costs and can be a strong incentive for plan enrollment.
5. HDHPs are a Growing Trend: Half of private industry workers with medical care plans were enrolled in HDHPs in 2024. This growing popularity shows that employees are seeing the value in these plans, making them a key component of a modern benefits strategy.

5 Common HDHP Myths

1. Myth: “HDHPs always cost more in the long run.” Reality: With lower premiums, employer HSA contributions, and tax savings, HDHPs can be a more cost-effective solution for both your company and your employees.
2. Myth: “Employees pay for everything until they hit the deductible.” Reality: While many services require the deductible to be met, all qualifying preventive care services must be covered at 100%. This includes annual physicals, screenings, and vaccinations.
3. Myth: “HSA funds are ‘use it or lose it’ like an FSA.” Reality: Unlike Flexible Spending Accounts (FSAs), HSA funds roll over year to year. Employees keep their HSA funds even if they change jobs or retire, providing a powerful long-term savings vehicle.
4. Myth: “HDHPs don’t work for families.” Reality: HDHPs are a flexible option for families. While they have a higher deductible, the monthly premiums are lower, and the family HSA contribution limit is significantly higher than the individual limit.
5. Myth: “HDHPs are only for young and healthy employees.” Reality: The IRS now allows HDHPs to cover certain treatments for chronic conditions as preventive care before the deductible is met. This makes these plans a valuable option for employees with chronic conditions who can benefit from the long-term savings potential of an HSA.

By offering an HDHP, you empower your employees to take control of their healthcare spending while providing a solution that aligns with your company’s financial goals. It’s a strategic move that helps you build a more robust, competitive, and cost-effective benefits package.  To learn more, call us today at 518-373-4111 or request a complimentary consultation.