What is the difference between a deductible and an out-of-pocket maximum?
The deductible is what an employee pays for covered care before the plan starts sharing the cost. The out-of-pocket maximum is the most the employee pays in a year for covered in-network care. One is where sharing begins, the other is where it ends.
What is behind the short answer.
The short answer is above. These are the details that decide it for a specific plan.
The deductible is the starting line
Until it is met, the employee pays the allowed amount for most covered services, apart from items like preventive care or flat copays.
The out-of-pocket maximum is the finish line
Deductible, copays and coinsurance for covered in-network care all add up toward it. After that the plan pays covered costs for the year.
A simple example
With a 1,500 dollar deductible, 20 percent coinsurance and a 4,000 dollar out-of-pocket maximum, an employee pays the first 1,500 dollars, then 20 percent of the rest, and never more than 4,000 dollars in total for covered in-network care.
What neither includes
Premiums, uncovered services and, usually, out-of-network care sit outside both numbers.
The starting line and the finish line on one chart.
Illustrative plan: the deductible is the first step, where sharing begins. The out-of-pocket maximum is the flat line, where it ends.
Illustrative figures to show the method. Real plans vary.
The bill
A 6,000 dollar allowed amount for a covered hospital service.
The deductible
The employee pays the first 1,500 dollars.
The coinsurance
20 percent of the remaining 4,500 dollars is 900 dollars.
The result
The employee pays 2,400 dollars and the plan pays 3,600 dollars.
What the rules say.
The figures and requirements below come from the federal sources cited at the end of this section. General information, not legal advice.
The 2026 federal limit
For 2026, the annual limit on cost sharing for non-grandfathered group health plans is 10,600 dollars for self-only coverage and 21,200 dollars for other-than-self-only coverage. HHS revised these from the 10,150 and 20,300 dollars first published for 2026.
Minimums and ceilings for HSA plans
A plan that qualifies for a Health Savings Account must have a deductible of at least 1,700 dollars self-only or 3,400 dollars family in 2026, and an out-of-pocket maximum no higher than 8,500 or 17,000 dollars.
It applies to each person on a family plan
Even on family coverage, no single person can be asked to pay more than the self-only limit toward covered in-network essential health benefits.
Plans can set theirs lower
The federal figure is the most any plan may ask. Many plans set the maximum well below it, so the plan summary is what tells you your number.
Sources: 42 U.S.C. 18022 | 26 U.S.C. 223
We put both numbers in the same row.
When we compare plans for employees, the deductible and the out-of-pocket maximum are shown together so the starting line and the finish line are visible at once.
Related pages.
The Deductible, Explained in Plain Terms
A deductible is the amount an employee pays for covered care before the plan starts sharing the cost.
The Out-of-Pocket Maximum, Explained in Plain Terms
The out-of-pocket maximum is the most an employee pays in a plan year for covered, in-network care.
What counts toward the out-of-pocket maximum?
Generally the deductible, copays and coinsurance for covered, in-network care count.
Avoiding Group Health Insurance Plan Confusion
The full guide to helping employees understand their group health plan.
Questions that come up next.
Short answers to the questions employees ask after this one. Each links to its own page.
Do copays count toward the deductible?
It depends on the plan. On some plans copays count toward the deductible and on others they do not. Copays generally do count toward the out-of-pocket maximum for covered in-network care, but confirm in your plan documents.
Is a high-deductible plan always the cheaper choice?
No. A high-deductible plan usually has a lower premium, but it can cost more in a year with significant care. The right choice depends on how much care the employee expects to use and whether they can cover the deductible if they need to.
Is coinsurance the same as a copay?
No. A copay is a fixed dollar amount for a specific service. Coinsurance is a percentage of the cost of a covered service that the employee pays after the deductible is met.
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General information about group health plan terms, not legal or tax advice. Plan-specific questions belong with the plan documents and the carrier.
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