How do deductibles work in a CDHP?

A deductible is the amount of financial responsibility you have to satisfy before your insurer pays any claims on your behalf. (Please note that claims for preventive care are usually paid by the insurance company without requiring you to apply them to your deductible.)

In a traditional health insurance plan, 100% of the money you contribute goes to paying for the plan’s premium and any out-of-pocket expenses like co-pays. In a CDHP, roughly 80% of the cost of the plan pays for the insurance premium, while the remaining 20% (usually half) is invested in a healthcare account for you by your employer. Assuming that the company contributes 50% of the premium savings or roughly 10%, the remaining 10% can be banked as savings and is a direct result of what is called “deductible leveraging,” and it represents the financial impact a higher deductible has on total premiums.

When you purchase a QHDHP, the deductible amounts are set by the IRS every year.  Most deductibles are constructed on a per-person basis. Family deductibles are called “aggregate deductibles” and most often allow one or all of the family members to incur medical claims and work together to satisfy the family’s deductible.

Deductible leveraging can be more beneficial if you adjust your employees’ deductibles from time to time to help you pay less premium to your insurer and assume more risk below their deductible. The inherent ability of the healthcare account to grow in value if it’s structured as an HRA or to build equity over time (if it’s structured as an HSA) allows you to adjust the CDHP’s deductible from time to time and keep the relative value of your health plan consistent from year to year for most of your employees. The CDHP affords the employer the opportunity to invest the premium savings in the healthcare accounts for their employees and watch the value or equity grow over time.

Coaches' Takeaway

A deductible is the amount of financial responsibility you have to satisfy before your insurer pays any claims on your behalf.  The IRS sets the out of pocket maximum amount you can be held accountable for.

Tools & Resources

CDHPCoach’s Storage Facility, where the Coach has organized and compiled a vast amount of tools and resources for you to access.


Housed here are key components and information within the book, Bend the Healthcare Trend which was the impetus behind the CDHPCoach.