CaliforniaChoice and Mellon Announce HSA Alliance

Ridgefield Park, N.J. and ORANGE, CALIF., March 14, 2005 - Mellon Financial Corporation's Human Resources & Investor Solutions (HR&IS) business and CaliforniaChoice, a CHOICE Administrators program, today announced an alliance to provide Health Savings Account (HSA) products and services to California consumers through the CaliforniaChoice website, calchoice.com.

The integrated HSA product includes financial services provided by Mellon, such as an interest-bearing FDIC -insured custodial account, with checking and debit cards for participants to pay for qualified medical expenses.  Participants will have an opportunity to open an associated Dreyfus investment account when the HSA account balance reaches a minimum threshold.  The Mellon-CaliforniaChoice HSA will also offer claims administration, customer service, online tools, employee education and enrollment. 

"HSAs represent a powerful new approach for addressing spiraling health care costs," said James D. Aramanda, Mellon vice chairman and head of its HR&IS business.  "Creating alliances with health plan management leaders such as CaliforniaChoice fits our strategy of becoming the premier provider of these services."

"Through our new alliance with Mellon Financial Corporation," said Ron Goldstein, president of CaliforniaChoice, "CaliforniaChoice has increased its selection of easily administered HSA solutions to address the growing demand for these accounts as part of a consumer directed healthcare program. By bringing together the nation's leading administrative company for employee-choice health benefits with a worldwide leader in financial services, we are offering people a great opportunity to control their healthcare expenses with online access to establish and manage their account."                    

HSAs, which were authorized by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, are portable health savings accounts that consumers can use to pay for qualified medical expenses. The accounts are offered in conjunction with a high deductible health plan that provides security against catastrophic medical costs.  Both employers and employees can contribute to HSAs - currently up to $5,250 for a family and $2,650 for individuals.  For employees, the pre-tax contributions will reduce their income taxes while allowing them to set aside additional money for their health expenses. With a minimum balance, employees can open a separate investment account, providing an additional opportunity to prepare for their health care security. Unused HSA balances can be carried forward from year-to-year, rolled over if the individual changes jobs or even used for post-retirement health expenses.