NU Online News Service, Jan. 19, 2004, 1:50 p.m. EST – CaliforniaChoice, Orange, Calif., is putting health savings accounts on its health coverage menu.[@@]

CaliforniaChoice, a for-profit health care purchasing group, has designed a new plan, the CaliforniaChoicePPO, for employers with 2 to 50 employees that want to offer HSAs along with other types of health coverage.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 lets taxpayers who buy high-deductible health coverage exclude HSA contributions from taxable income and spend HSA assets on qualified health care expenses without paying federal income taxes on the distributions.

HSA holders who join the CaliforniaChoicePPO plan can combine high-deductible coverage, HSA tax savings and the discounts available through the provider network developed by Blue Shield of California, San Francisco, CaliforniaChoice says.

The plan has a deductible of $2,400 for individuals and $4,800 for families. Qualified individual participants can deduct up to $2,400 in HSA contributions from taxable income, and qualified family participants can deduct up to $4,800 in HSA contributions from taxable income.