Rice Bill Allows for the Creation of Health Savings Accounts

TRENTON – A measure sponsored by Senator Ronald L. Rice, which would allow for the establishment of Health Savings Accounts (HSAs), received final legislative approval today.

“The health care system in New Jersey is changing rapidly, but not necessarily for the best,” said Senator Rice, D-Essex. “A lot of the cost is being shifted to some of our neediest citizens, and we need to fight the federal regulations that back New Jersey’s residents into a corner.”

The bill, S-2574/2435, would permit the establishment of HSAs in New Jersey. The bill would also alter State law that currently requires health insurance contracts to provide certain non-preventative care without the application of a deductible.

Senator Rice stated that this bill is necessary to bring State law in compliance with the federal requirement that High Deductible Health Plans (HDHPs) have no first dollar coverage, except for preventative care.

“I want to stress that HSAs are not for everyone,” said Senator Rice. “The federal government created a program and I want to make sure that we simply do not just accept it, but rather we improve it. It is our responsibility as elected officials to make this bill the best one possible.”

Senator Rice noted that the federal “Medicare Prescription Drug, Improvement and Modernization Act of 2003” allow people to establish HSAs to pay for their medical expenses. To create and account, they must be enrolled in HDHPs, added Senator Rice.

According to Senator Rice, federal law dictates that preventative care is the only type of medical expense allowed to be paid by HSAs if the deductible has not yet been met.

“The State’s are allowed to determine which services can be considered preventative,” said Senator Rice. “In New Jersey we require insurers to cover certain services such as the screening for lead paint poisoning in children, any medical follow-up and treatment. I want to make certain that all childhood immunizations, and screening for hearing loss are also covered.”

The bill now heads to the Governor’s office for enactment.

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