What must high-deductible health plans (HDHPs) offer to qualify for Health Savings Accounts?

High-deductible health plans (HDHPs) are specifically designed with higher deductibles and lower premiums compared to traditional health insurance plans. To qualify for Health Savings Accounts (HSAs), these plans must meet certain criteria outlined by the IRS, which include having a minimum deductible and maximum out-of-pocket limits. The appeal of HDHPs lies in their ability to provide a lower monthly cost for premiums, which makes them attractive for individuals who want to save on monthly expenses while potentially using HSAs to pay for qualified medical expenses.

This structure allows for savings and tax advantages through HSAs, where individuals can contribute pre-tax dollars that can grow tax-free and can be withdrawn tax-free for eligible health expenses. The higher deductible is a key characteristic of HDHPs, distinguishing them from other insurance plans that typically feature lower deductibles with higher premiums. This combination of higher deductibles and lower premiums aligns well with the purpose of HSAs, making it financially advantageous for many individuals.