when you reach this limit your plan pays 100 of your expenses for in network care if you re interested in taking this route it s important to understand how hdhps work and how having one will change how you pay for health care 
hdhps became more common when hsa establishing legislation was signed into law in 2003 6special considerationsone of the perks of an hdhp is being able to open a health savings account hsa which is a tax advantaged savings account in fact hsas are exclusively available to people covered by an hdhp and you can t have any other type of health insurance to qualify for one 7regular contributions to the account are made by the insured individual or their employer these funds are not subject to federal income taxes at the time of the deposit or withdrawal 7 the idea is to use them for qualified medical expenses that hdhps don t cover including an hsa can cut costs if you face high deductibles as long as withdrawals from an hsa are used to pay for qualified medical expenses that are not covered under the hdhp the amount withdrawn will not be taxed unlike a flexible spending account fsa contributions made to an hsa do not have to be spent or withdrawn during the tax year they were deposited any unused contributions can be rolled over indefinitely 9for wealthy families who can afford to self insure an hdhp allows access to hsa tax advantaged savings that they can use in retirement when the early withdrawal penalty for nonqualified expenses no longer applies withdrawals for nonqualified expenses are subject to income tax and a 20 early withdrawal penalty if you re under the age of 65 10advantages and disadvantages of an hdhpthe high cost associated with hdhps comes with certain benefits and drawbacks we ve listed some of the most common ones below as noted above insured individuals with an hdhp end up paying lower monthly premiums this can save you money if you know that you re only going to use the plan for preventive care rather than more complicated procedures make sure you stay within your network in order to reap the benefits otherwise you ll incur extra costs covered individuals are allowed to use an hsa in conjunction with an hdhp remember that hsas are tax advantaged accounts which can be used to pay for qualified medical expenses that your plan may not pay for such as acupuncture and dental expenses the money that you deposit into your hsa is tax free and can help cut the cost of your high deductible the main and obvious disadvantage is the high cost associated with these plans higher deductibles mean that you have to pay more out of your own pocket for your medical and health care before the plan actually starts to pay for you this can put a dent in your pocket especially if you have unexpected health issues with which you have to deal you have a high deductible with a plan like this hence the name the deductible is the portion of the plan that you re responsible for before your insurer steps in to cover your expenses keep in mind though that your preventive care is completely covered which means that you ll have to pay for covered costs on your own lower monthly premiumsworks with a health savings account which is tax free and covers qualified medical expenseshigher out of pocket costshigher deductiblesexample of an hdhpas noted above high deductible health plans are suitable for people who are fairly healthy and don t need to pay for complicated medical procedures they are suited for people who generally only require preventive care for instance a 30 year old without any underlying conditions and other health problems may be considered a good candidate for an hdhp this person may only require certain preventive procedures such as flu shots nutritional counseling or health screenings they would not be responsible for any copays or coinsurance either but they may need to save up in case there is an unexpected medical emergency as their plan wouldn t cover this expense until they reach their deductible 