Q&A: Can Two Plans Pay for the Same Procedure Under an HDHP?

Question:

We offer a High-Deductible Health Plan (HDHP) and a self-funded dental plan. The medical plan covers oral surgery after the deductible is met; however, the dental plan also pays half of any amount applied to the member’s deductible.

I am familiar with the general rule that employees on an HDHP cannot use other coverage to pay medical expenses, such as Medicare or a Health FSA, that would ordinarily be applied to the plan’s deductible. Does this rule apply to care that’s covered by both the medical and dental plans?

Answer:

Nothing prohibits medical/dental procedures from being covered by both a group health plan and a dental plan, even if the health plan is an HDHP.

I believe what you may be referring to is an IRS limitation on the ability of individuals to contribute to an HSA.  To be eligible to make such contributions, an individual must:

1. Have coverage through an HDHP that meets certain regulatory requirements.
2. NOT have other “disqualifying coverage,” which generally means another health plan, Medicare, or a Health FSA that the individual can use to pay claims before the HDHP’s deductible is met. 

Your situation raises the question of whether the dental plan is considered disqualifying coverage. Since dental insurance is specifically listed as an exception to the IRS rule, it is not. Neither dental nor vision insurance are considered disqualifying coverage, and therefore, they do not interfere with HSA eligibility.

Note that which plan is primarily responsible for a given expense is generally controlled by detailed Coordination of Benefits rules, which should be laid out in the insurance certificates. The medical plan will typically pay first and apply its deductible. Then, as a secondary payer, the dental plan may reimburse part of the amount applied to the medical deductible.

Finally, you may hear or read explanations indicating that having disqualifying coverage (such as Medicare) prohibits an employee from enrolling in an HDHP. That’s incorrect. Disqualifying coverage only prevents employees from contributing to an HSA, not from participating in the underlying HDHP.