No one is immune to the rising costs of health care.

Low-income families face Medicaid cuts while dual-income suburban families struggle with growing medical bills. Even wealthy Americans worry that catastrophic medical care might empty their nest eggs. Small business owners, their employees, and the self-employed are also hit hard, because medical insurance premiums have increased with the high cost of medical care. Medical insurance is simply unaffordable for many.

There are no easy answers to our national medical crisis, but fortunately there is help for the small-business community. The Health Savings Account (HSA) became available this year to benefit those with high-deductible medical insurance plans, which is often the only kind of insurance plan this group can afford. Even individuals who are not employed but also pay for high-deductible insurance plans are eligible.

How does it work? If a small business owner has a high-deductible plan for his employees (at least a $1,000 deductible plan), the business owner and the employees can contribute to Health Savings Accounts up to the deductible amount but not to exceed $2,600 for individuals and $5,150 for families in 2004.

Those over age 55 can contribute an additional $500 this year. The amount the employer contributes is not included in the employees' taxable income and any amount the individual contributes is tax deductible.

Distributions from HSAs are tax-free as long as the money is used for medical expenses. Medical expenses can include over-the-counter medication and regular preventative care that insurance often doesn't cover anyway. Qualified expenses can also include medical insurance premiums if the individual has become unemployed. Nursing home expenses also qualify under this program.

Health Savings Accounts have been compared to IRAs because the money belongs to the individual, not the company, and the money can continue to grow tax-free in the account. The account is not forfeited at the end of the year if it is not used.

HSAs are different from IRAs in an important way, however: HSA contributions and distributions are tax-free while IRA money is either taxable when it goes into an account or when it comes out, depending on the type of IRA account.

This type of account is new, and it may not be easy to find a provider. Some insurance companies offer this service as well as some national banks. Providers of the older, more restrictive Medical Savings Account are offering this service and also are allowing Medical Savings Accounts to be transferred into HSAs. A resource for finding Health Savings Account providers can be found at the U.S. Treasury site: www.treas.gov.

The Health Savings Account won't solve the medical crisis that is affecting our country, but it can help the small-business community who can only afford to pay for high-deductible medical insurance plans.

Some of these will be young families who work for small businesses and have frequent doctor visits, immunizations, and multiple late-night trips to the emergency room.

Others who might benefit will be small business owners who can use the HSA as a retirement savings account, as health care cost will certainly increase with age.