HR, Payroll and Benefits News

Health Plans: High Deductible vs Non-High Deductible

This article highlights the similarities and differences of the High-Deductible Health Plan (HDHP) and Non-HDHP.

Similarities between the HDHP and Non-HDHP

  • In-network preventive services are covered at 100%
  • Coverage for federally required preventive drugs at 100%
  • Both have a deductible
  • In-network coinsurance is 10% (the amount you pay after the deductible for specific services; the plan pays the remaining 90%)
  • In-network providers will provide lower out-of-pocket expenses than out-of-network providers
  • Both allow participation in the Well Wisconsin program to earn a $150 wellness incentive
  • Both provide an opportunity to enroll in Uniform Dental Benefits for preventive dental services
  • Both offer out-of-network coverage through the Access HDHP and Access Non-HDHP. Note: Access plans are more expensive.
  • Premiums will be deducted from your paycheck regardless of whether you use your health insurance

Differences between the HDHP and Non-HDHP

  • HDHPs have lower premiums
  • HDHPs include a Health Savings Account (HSA) to help you prepare for out-of-pocket expenses. An HSA provides three separate tax benefits:
       o   Contributions are tax-deductible
    o   HSA assets may grow tax-free (through interest and/or investing)
       o   Withdrawals for qualified medical, dental, and/or vision expenses are not taxed
  • HDHPs include an employer contribution to the HSA (up to $750 for single coverage, $1,500 for family) which remains in your HSA until you use it
  • Non-HDHP have a deductible for medical services and a separate deductible for pharmacy benefits; HDHPs have a deductible that includes medical services and pharmacy benefits
  • Non-HDHP have an out-of-pocket limit for medical services and a separate out-of-pocket limit for pharmacy benefits; HDHPs have a combined out-of-pocket limit that includes medical services and pharmacy benefits
  • Non-HDHP have lower deductibles

Prepare for expected/unexpected out-of-pocket health, dental, and/or vision expenses

Review the expenses you have incurred in the past calendar year for health, dental, and vision services to help you prepare for the next calendar year. Some of the ways you can save for expected and unexpected out-of-pocket expenses include:

  • With a HDHP you may use the HSA for qualifying medical, dental and/or vision expenses or Limited Purpose Flexible Spending Account (FSA) for qualifying dental, vision, and post-medical deductible expenses. The intent of these accounts is to set aside pre-tax earnings to help pay for qualifying out-of-pocket expenses.
  • With a Non-HDHP you may set aside pre-tax earnings in a Health Care FSA for qualifying medical, dental and vision expenses, or after-tax earnings in a personal account for out-of-pocket expenses.

For additional information, review the UW System Human Resources Employee Benefits website.

Source: UW System Human Resources