Attention: New Jersey Employers

Health Savings Account (HSA) Extension Signed into Law

(Source:  New Jersey Business & Industry Association)

Just in time to beat a federally imposed December 31 deadline, Governor Richard Codey has signed legislation that enables employers to continue to write Health Savings Accounts (HSAs) for their employees and obtain the cost savings and tax benefits derived through these plans. By signing the bill, A-4543 (Cohen, Russo)/S-2435 (T. Kean)/S-2574 (Rice, Bucco), Codey ensured that New Jersey would not be the only State in the nation where businesses and their employees could not make full use of the savings that HSAs offer.

HSAs were created by the federal government to allow employers and individuals to contribute tax-free to savings accounts that are then used to pay for routine medical expenses. Unlike medical 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, however, require those using HSAs to be covered by a high-deductible health insurance plan that covers hospital stays and expensive medical treatments. New Jersey, along with several other states, did not provide for the sale of a high-deductible health plan that met federal requirements. With enactment of this measure, New Jersey employers and their employees will continue to enjoy the savings that HSAs provide.

Interested in Learning How HSAs Can Help You Reduce Health Insurance Costs?

Contact:
Denise Angleman
Senior Vice President, Employee Benefits
201.845.6600, Ext. 1259
dangleman@niagroup.com