NJ Permits Use of Health Savings Accounts

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New Jersey has enacted a law permitting employers to provide Health Savings Accounts (HSA) as an alternative to group health care plans.  HSAs allow for employers and individuals to contribute tax-free to savings accounts that are then used to pay for routine medical expenses.  Unlike flexible savings accounts, where funds must be spent by the end of the year or be forfeited, HSAs allow account balances to build up over time.  The accounts are also portable, moving with employees if they change jobs.

Federal regulations require those using HSAs to be covered by a high-deductible health insurance plan that covers hospital stays and expensive medical treatments.