First Niagara offering health savings accounts.

Byline: Jonathan D. Epstein

Dec. 5--First Niagara Financial Group has become the first local bank to offer health savings accounts (HSAs), entering a market that is expected to grow significantly as employers and workers try to lower insurance costs.

At the same time, HealthNow New York's Blue Cross Blue Shield of Western New York is joining with 30 other Blue Cross and Blue Shield companies nationwide to form their own bank that will also offer the accounts through the insurers, including in the Buffalo Niagara region.

Health savings accounts are special bank accounts set up in conjunction with so-called high-deductible health plans. Money can be set aside in the accounts by both employees and employers before taxes, and remains tax-free if it is used to pay medical expenses.

Unlike a flexible spending account or health reimbursement account, the money can be rolled over from year to year and can be carried to a new job and into retirement.

The new…