As open enrollment approaches, employers are evaluating how to provide quality health care options while keeping costs manageable. One benefit strategy worth considering is offering a high deductible health plan (HDHP).
HDHPs are increasingly popular because they strike a balance between affordability and flexibility. While these plans carry higher deductibles, they come with lower premiums—helping employers control health care costs while still delivering meaningful benefits to employees.
When paired with a health savings account (HSA), HDHPs can empower employees to manage health care spending wisely while building tax-advantaged savings for the future. This makes them an attractive option for both employers and employees.
The IRS recently announced updated limits for 2026, giving employees even greater savings potential:
HDHP Limits
HSA Contribution Limits
These updates reflect annual inflation adjustments, enabling employees to set aside more pre-tax dollars for health care expenses.
Some employers hesitate to offer HDHPs due to myths about cost or employee dissatisfaction. In reality, these plans can deliver strong value when communicated effectively:
Myth: “HDHPs always cost more in the long run.”
Reality: With lower premiums, HSA contributions and tax savings, HDHPs are often more cost-effective than traditional plans, especially for those with fewer medical needs, who do not reach their deductible and who manage their health care spending efficiently. However, the right plan choice will vary by available options, health care spending, plan coverage and personal circumstances.
Myth: “I pay for everything until I hit the deductible.”
Reality: While HDHPs require that many health care services, such as routine sick visits, emergency room or urgent care visits, be paid for out of pocket until you meet the deductible, these plans must cover qualifying preventive services 100% even before the deductible is met. Such services include annual physicals, screenings, prenatal care and vaccinations.
Myth: “If I don’t use the money in my HSA, I lose it.”
Reality: If you contribute to an HSA as part of your HDHP, the funds in your HSA roll over from year to year and don’t go away until you spend them. This differs from a flexible spending account, or FSA, which only allows for a rollover amount of $660 in 2026. You keep and use your HSA even if you retire or change employers or health plans. However, if your new health plan is not HSA-eligible, you cannot contribute new funds to your HSA.
Myth: “HDHPs don’t work for families.”
Reality: HDHPs can be an effective and flexible option for families. While deductibles are higher for family plans, monthly premiums are lower. Similarly, the family out-of-pocket maximum caps the amount you pay for your family’s covered services in a year. The HSA contribution limit for families is also higher than the individual limit, allowing comparable savings to offset potential costs.
Myth: “HDHPs are only for the young and healthy.”
Reality: HDHPs may generally appeal to younger or healthier employees, who typically have fewer medical needs; however, these plans offer benefits that can be advantageous for various demographics. For example, IRS guidelines now enable HDHPs to cover certain chronic condition treatments as preventive care, such as insulin for diabetes, allowing these costs to be covered before meeting the deductible. Tax-advantaged employer and employee HSA contributions may allow for significant long-term savings for individuals with ongoing health care expenses, as well as long-term financial planning, such as for health care needs in retirement.
For employers, offering an HDHP can be a strategic way to manage costs while still providing employees with flexibility, tax advantages, and long-term financial benefits. As open enrollment approaches, now is the time to evaluate whether an HDHP—especially when paired with an HSA—could enhance your benefits strategy.
Open enrollment isn’t just about forms and deadlines—it’s a chance to reinforce your company’s value to employees. By starting early with tailored benefits, you can turn 2026 open enrollment into a strategic win for your business.
Zinn Insurance is here to bulletproof your business with benefits strategies that actually work—no fluff, no templates, just results.
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