Health Savings Account in New Jersey

A: A Health Savings Account (HSA) is currently not available to any individual buyer in New Jersey. An HSA has two components: 1) the required high deductible health insurance and 2) the savings account. The savings account is easy. You could use any of the accounts listed at www.healthsavingsacount-hsa.com . The more difficult part is obtaining the required qualifying insurance. At this time, it appears that HSA-qualified insurance is not available to individuals in New Jersey because 1) federal law conflicts with state law regarding qualifying coverage and the IRS made a stink about this in recent publications, 2) temporary transition relief issued by Congress expired at the end of last year and does not seem likely to be renewed for 2006, and 3) the health plans based outside of New Jersey and sold to New Jersey residents as HSA-qualified (often referred to as MEWAs) appear to fail the state legal requirements and are not deemed to be legal health plans in the state. For this reason, we cannot recommend this route. The only likely solution is to obtain the required HDHP insurance through an multi-state employer-provided group insurance plan. Unfortunately, this leaves out individuals and small businesses. For a broad viewpoint on the status of health insurance in New Jersey, see the editorial at www.tonynovak.com/editorial