Should we offer a high deductible health plan alongside our traditional plan?

Offering a high-deductible health plan alongside a traditional health plan can give employees more flexibility in how they manage their healthcare expenses.

But the value of offering both depends on how the plans are designed, how much employees contribute toward each option, and whether the differences are meaningful enough to justify having multiple choices.

What makes these plans different?

A high-deductible health plan generally requires employees to pay more toward certain medical expenses before the plan begins sharing those costs. In exchange, HDHPs often have lower premiums.

When the plan meets IRS requirements and the employee is otherwise eligible, it can also provide access to a Health Savings Account (HSA), allowing employees to set aside tax-advantaged funds for qualified healthcare expenses.

Traditional plans may offer lower deductibles, copays for certain services, or more predictable costs when employees receive care. However, those features often come with higher premiums.

Neither design is automatically better. Their value depends on the combination of premiums, cost-sharing, and how employees use healthcare.

Who might benefit from each option?

Employees who want to minimize payroll deductions and build healthcare savings may find an HSA-qualified HDHP attractive.

Employees who prefer predictable copays or anticipate regular healthcare expenses may be more comfortable with a traditional plan.

But these aren't rigid categories.

An employee with significant medical needs might still find an HDHP financially advantageous if the premium savings and employer HSA contributions outweigh the additional out-of-pocket costs.

Likewise, an employee who rarely visits the doctor may prefer a traditional plan because they value the predictability of its coverage.

The best way to compare the options is to evaluate their potential financial outcomes rather than assume which employees should choose each plan.

How do we determine whether offering both makes sense?

We consider several factors:

• Employee contributions: Is there a meaningful difference in payroll deductions between the plans?
• Out-of-pocket expenses: How do deductibles, copays, coinsurance, and out-of-pocket maximums compare?
• Employer HSA contributions: Could contributing to employees' HSAs improve the value of the HDHP?
• Provider networks: Do both plans offer appropriate access to doctors, hospitals, and specialists?
• Workforce needs: Would employees benefit from different approaches to balancing premiums and healthcare expenses?
• Employer costs: How would enrollment in each plan affect your organization's overall benefits spending?

We can also model different healthcare scenarios to illustrate how the plans might perform for employees with low, moderate, and high medical expenses.

That helps make the trade-offs more understandable before employees are asked to choose.

Make sure the plans offer meaningful differences.

If two plans have similar employee premiums and comparable out-of-pocket expenses, offering both may add complexity without providing much additional value.

On the other hand, pairing a traditional copay-based plan with an HSA-qualified HDHP can create a useful distinction between employees who prefer more predictable costs when receiving care and those who value lower payroll deductions and the opportunity to build healthcare savings.

The contribution strategy matters, too. If the employer subsidizes one option much more heavily than the other, employees may gravitate toward that plan regardless of which design would otherwise suit them best.

Employee education is part of the plan design.

Even a thoughtfully structured plan lineup can fall short if employees don't understand their options.

Clear comparisons should explain not just the deductible and premium, but how the plans work when employees visit a doctor, fill prescriptions, or experience significant medical expenses.

At MPOWR, we evaluate the financial and practical differences between plan options and help employers communicate those differences in ways employees can understand.

Offering an HDHP alongside a traditional plan can be an effective strategy, but it should be a deliberate choice—not simply an effort to offer more options.

The objective is to give employees genuinely different ways to manage their healthcare expenses while supporting your organization's financial goals.