High Deductible Health Plans for California Employers
A High Deductible Health Plan (HDHP) offers lower monthly premiums in exchange for higher deductibles that employees pay before coverage kicks in. HDHPs are the only plan type that allows pairing with a Health Savings Account (HSA), which gives employees a powerful triple-tax-advantaged way to save for healthcare costs.
2024 IRS HDHP requirements: minimum deductible of $1,600 individual/$3,200 family; out-of-pocket maximum no higher than $8,050 individual/$16,100 family. All preventive care (ACA preventive services) must be covered at $0 before the deductible.
HDHP Premium Savings
California HDHP premiums typically run 20–30% below equivalent traditional plan premiums. For an employer with 15 employees, switching from a PPO to an HDHP+HSA can save $2,000–$3,500/month in employer premiums. Many employers redirect some of those savings into employer HSA contributions, funding employee HSAs as a visible benefit.
Who HDHPs Work Best For
HDHPs are most effective for younger, healthier workforces with low healthcare utilization — tech startups, professional services firms with younger staff, and businesses where employees are financially comfortable carrying a higher deductible. Employees with significant ongoing medical needs (chronic conditions, planned procedures, families with children) may prefer a lower-deductible plan even at higher premiums.
HDHP as Part of a Multi-Option Strategy
Many California employers offer HDHP+HSA as one option alongside a traditional HMO or PPO — a dual-option or three-option strategy. This lets cost-conscious healthy employees choose HDHP savings while employees with higher healthcare needs choose the richer plan. Contribution equalization (contributing the same dollar amount to either plan's premium) lets employees choose based on their needs, not cost pressure.