Benefit Checkup: What’s the Current Health and Utilization of HDHPs?

While U.S. worker enrollment has tailed off a bit compared to the recent past, experts say high-deductible health plans (HDHPs) along with consumer-directed health plans (CDHPs) still represent an important option within the total rewards continuum.

According to the Internal Revenue Service (IRS), for calendar year 2025, a “high-deductible health plan” is defined under § 223(c)(2)(A) as a health insurance plan with an annual deductible that is not less than $1,650 for self-only coverage or $3,300 for family coverage, and for which the annual out-of-pocket expenses (deductibles, copayments and other amounts, but not premiums) do not exceed $8,300 for self-only coverage or $16,600 for families.

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Lead with Well-Being in HDHP and HSA Communications

National Health Statistics Reports from the U.S. Centers for Disease Control and Prevention (CDC) reveal that among Americans with employer-based coverage, enrollment in an HDHP increased from 40.2% in 2019 to 43.4% in 2021, followed by a decrease to 41.9% in 2023 (the most recent year with full-year data). For directly purchased coverage, enrollment in HDHPs increased from 44.3% in 2019 to 47.0% in 2020, followed by a decrease to 43.1% in 2023.

The CDC also found that people with employment-based coverage were nearly four times more likely to be enrolled in a CDHP than their counterparts with directly purchased coverage.

A CDHP is a preferred provider organization (PPO) health insurance plan with a higher deductible but lower premium than traditional plans. It also includes a health savings account (HSA) or flexible spending arrangement (FSA) component. The HSA allows policyholders to save pretax dollars to pay for qualified medical expenses.

Putting a Focus on Cost Reduction

According to Jake Spiegel, a research associate at the Employee Benefit Research Institute (EBRI), while the institute uses a slightly different data source than the CDC for calculating HDHP enrollment — the Medical Expenditure Panel Survey (MEPS) — its results are “directionally similar” to those from the CDC.

“Enrollment in HDHPs appears to have dipped since a peak in 2021, when 60% of workers with single coverage and 58% of workers with family coverage were enrolled in an HDHP,” Spiegel said. “As of 2023, those figures are now 55% and 56%, respectively.”

As far as understanding the cause of this dip, Spiegel offered cost as a key possibility.

“Workers may be struggling to manage those higher deductibles,” he said.

Spiegel noted, however, that on the flip side, a recent IRS rule allows employers that offer HDHPs to cover certain drug classes and other preventive health services on a pre-deductible basis, which can help workers better manage chronic conditions, while keeping their out-of-pocket costs lower.

Under this rule, IRS Notices 2024-71 and 2024-75 expand the list of “preventive care” benefits permitted to be provided by an HDHP without a deductible and the list of benefits considered “medical care expenses” under group health plans.

Spiegel advised total rewards professionals who want to increase enrollment in their organization’s HDHPs to carefully position these offerings relative to other plans.

“Adding an inducement for enrollment — such as an employer contribution to a health savings account, for instance — can make HDHPs more attractive relative to non-HDHP plans,” he said.

An Expected Offering Within a Benefits Package

Sander Domaszewicz, a senior principal at MercerWell, a client advisory group within Mercer’s health practice, said most of his firm’s aggregate data is related to employers rather than a breakout of employee activity within those employers, but he offered some applicable survey data to demonstrate related recent trends.

According to Mercer’s National Health Survey, for example:

In 2019, only 71% of employers with 500 or more employees offered an HSA-eligible HDHP, with 31% of employees enrolling at a total average cost $10,870.
In 2024, employers offering that type of plan jumped to 84% and those enrolling rose to 37%, while the total cost increased conservatively to $14,018.

“The increase over the last five years shows HSAs have become a ‘standard medical plan offering,’ only behind PPOs [at 90% in 2024],” Domaszewicz said, adding that the 2024 total cost for HSA plans remains significantly lower than PPO plans, at $16,930.

He said that, anecdotally, Mercer has seen some trends around employees choosing HSA options, with:

Individual employees a bit more likely to choose them than families;
Younger and older employees a bit more likely to choose them than more middle-career employees; and
Lower- and higher-income employees more likely to choose them than middle-income employees.

Maximize the HDHP to Maximize Enrollment

Domaszewicz noted HDHPs, and specifically HSA-compatible HDHPs, continue to be a very viable benefits option for employers and employees. Also, he said, they meet the needs of many within a workforce and are a very common medical benefit option for employers to offer.

“Not providing a way for individuals to save for health needs now and in the future in an efficient, tax-advantaged way would be losing an important benefit for many working Americans,” Domaszewicz said.

He added that employers also are always looking to offer options that will help attract and retain employees, so removing this option would be generally counter to those interests.

“Not offering an HSA-compatible medical plan option has almost become like not offering a way for employees to save for retirement [with a 401k, 403b, etc.],” Domaszewicz said. “It’s something not done by most large employers.”

He explained it will be important for employers to increase contributions to accounts to match inflation, and to make sure the maximum out-of-pocket costs for these plans are reasonable considering workforce means and affordability. In addition, he said to consider innovations such as varying contributions to accounts based on salary, affordability and matching.

“While healthcare consumerism, HDHPs, CDHPs and HSAs have become less of a discussion point among benefit professionals in the last decade compared to the decade prior, their current commonplace nature should not exclude them from continuing to be an important topic and tool in overall benefits and total rewards strategies,” Domaszewicz said.

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