Raising Deductibles Is the Easy Move. Funding the HSA Is the Smart One.

Health benefit costs are climbing at the fastest rate in fifteen years. Employers are projecting roughly a 9 to 10 percent increase for 2026, driven by catastrophic claims and the rising cost of specialty and GLP-1 medications. Faced with numbers like that, the most common response is also the bluntest one. Roughly half of employers say they are likely to change plan design in 2026 in ways that move more cost onto employees, usually by raising deductibles and out of pocket maximums. On its own, that approach saves money on paper and quietly erodes the value of the benefit your employees actually feel.

There is a more deliberate version of the same move, and it is one a lot of employers with 25 to 500 employees leave on the table. If you are going to raise the deductible, pair the high deductible health plan with a health savings account you actually fund. Done well, this combination lowers your premium, gives employees a tax-advantaged tool to cover the higher deductible, and shifts the conversation from "we cut your benefits" to "we changed how the money flows." The mechanics matter, and so does the timing, because the rules around HSAs got meaningfully better heading into 2026 and 2027.

Why the HDHP Plus HSA Pairing Works

A high deductible health plan, by definition, carries a higher deductible in exchange for a lower premium. The trade is real money. Moving a portion of your population from a traditional PPO to a qualified HDHP can reduce premium spend in a way that raising the deductible on the PPO alone often cannot match. The problem most employers run into is that employees see the higher deductible, panic, and conclude the company is shifting risk onto them without any cushion.

That is exactly the gap a funded HSA closes. An HSA is a tax-advantaged account that only people enrolled in a qualified HDHP can use. Money goes in pre-tax, grows tax-free, and comes out tax-free for qualified medical expenses. It is the only account in the tax code with that triple advantage. When an employer contributes to that account, the higher deductible stops looking like a takeaway and starts looking like a deal. The employee carries more exposure on paper but holds real dollars to cover it, and anything they do not spend rolls over and stays theirs, even if they leave.

For 2026, an individual can contribute up to $4,400 to an HSA and a family up to $8,750, including whatever the employer puts in. The IRS has already released the 2027 numbers, which rise to $4,500 for individuals and $9,000 for families. To qualify, the plan needs a deductible of at least $1,700 for self-only coverage in 2026, rising to $1,750 in 2027. Those limits give you room to design a contribution that meaningfully offsets the deductible you are asking employees to absorb.

The Math Most Employers Skip

Here is the calculation worth running before your next renewal. Take the premium savings from moving to or sharpening an HDHP, then redirect a portion of that savings into employee HSAs rather than keeping all of it. Suppose moving a slice of your population to a qualified HDHP saves $1,200 per employee per year in premium. If you put $600 of that into each employee's HSA, you have still cut your net cost by $600 per head while handing employees a tangible benefit that covers a real chunk of their deductible.

The psychology of that is very different from a flat deductible increase. Employees who get an employer HSA contribution tend to view the plan as competitive rather than degraded, and the dollars are visible in an account with their name on it. You have controlled cost and protected morale at the same time, which is the whole point. The employers who struggle are the ones who capture the premium savings, keep all of it, and wonder why the open enrollment feedback is hostile.

There is a retention angle too. Because HSA balances belong to the employee and roll over indefinitely, a recurring employer contribution functions a little like a benefit that compounds. Employees who build a balance over a few years have a real reason to value the plan, and by extension the job.

What Changed Recently, and Why It Helps

The case for HDHP plus HSA designs is stronger now than it was a couple of years ago, because several rule changes removed the friction that used to make these plans feel restrictive.

Telehealth is the clearest example. A permanent safe harbor now allows HDHP enrollees to use telehealth and other remote care services before meeting their deductible without losing HSA eligibility. For years this was an on-again, off-again provision that created real confusion. It is now settled, which means you can offer first-dollar virtual care alongside a high deductible plan and not jeopardize anyone's ability to contribute.

Direct primary care also became easier to combine with an HSA. As of 2026, a direct primary care membership is treated as compatible with HSA contributions as long as the fee stays under $150 per month for an individual or $300 for a family. That opens the door to pairing a high deductible plan with a flat-fee primary care relationship, which can take pressure off both employees and the plan for routine care.

Finally, the menu of qualifying plans widened. Starting in 2026, Bronze and Catastrophic plans on the ACA marketplace automatically count as HSA-eligible high deductible plans. That matters most for employers using an individual coverage HRA, because ICHRA participants can now pair those marketplace plans with an HSA. If you have been weighing an ICHRA as an alternative to a group plan, the HSA compatibility makes the model more attractive than it was.

How to Roll It Out Without Losing the Room

The strategy only works if employees understand it, and this is where most rollouts fall short. A high deductible plan introduced with a one-line note in the enrollment packet will read as a cut no matter how generous the HSA contribution is. Treat the communication as seriously as the plan design.

Be specific about the dollars. Tell employees exactly how much the company will deposit, when it lands, and that the money is theirs to keep. Walk through a realistic example of how the deductible, the HSA contribution, and a typical year of claims actually play out, because the abstract numbers rarely land on their own. Make clear what the account can be used for, including the fact that it can be invested and carried into retirement once the balance grows. Many employees have never been told that an HSA is one of the most tax-efficient retirement vehicles available to them, and that framing changes how they treat it.

It also helps to keep at least one lower-deductible option on the table for employees who genuinely cannot absorb the exposure, such as those managing chronic conditions or supporting families with steady medical needs. A well-designed menu lets the HDHP plus HSA do the heavy lifting on cost while preserving a path for the people who need predictability.

The Bottom Line

Cost shifting is going to be a feature of the 2026 benefits landscape whether employers like it or not. The question is not really whether to ask employees to carry more, but how to do it in a way that holds up. Raising a deductible and pocketing the savings is the version that costs you goodwill. Raising the deductible, funding an HSA, and explaining the trade clearly is the version that controls spend and keeps your people on side. With the contribution limits rising again in 2027 and the rules around telehealth, direct primary care, and marketplace plans finally working in your favor, this is a good year to run the numbers seriously.

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Benefits Collective helps employers design health plans that control cost without gutting the benefit employees value. If you are weighing plan changes ahead of your renewal, schedule a consultation to talk through whether an HDHP and HSA strategy fits your population.