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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

Content is the opinion of the author and does not represent the position of any other person or entity. Information is from sources believed to be reliable but cannot be guaranteed.

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Qualifying for a health savings account

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.

Q: I don’t understand why some people do not qualify for health savings accounts.

A: Congress built a “catch 22” into the law that allows us to pay for our out-of-pocket expenses tax free and build up a tax-free reserve for future medical expenses. The catch is two-pronged: 1) that we must be enrolled in a "qualifying" health insurance plan and 2) that we may not be enrolled in a "non-qualifying" health insurance plan. Unfortunately, the majority of health insurance plans in this country, including the high deductible health insurance plans, do not meet the IRS definition of a “qualifying” plan. That means that most people do not qualify for a health savings account. At last count there were 1.6 million people covered by health savings accounts. That is less than one half of one percent of all Americans. In short, this is a good government-endorsed program but a long way from being “mainstream” in the real world of health benefits. Fortunately there are a number of good alternatives available to most people that are as good or better than a health savings account. See the Frequently Asked Questions page at for a more in-depth discussion of this topic. For those many people who do not qualify for a health savings account, an article discussing some tax-advantaged alternatives is also posted on this same Web site.


More resources: article" "Alternatives to Health Savings Accounts"