Tax-advantaged bank accounts used to pay health care costs are growing in popularity, but they have been slow to catch on in New Jersey, according to Ridgefield-based Information Strategies Inc.

The company has been collecting data on so-called health savings accounts since they hit the market more than three years ago.

The accounts are a form of self-insurance and are used by consumers who have high-deductible health insurance policies through their employers or purchased on their own.

At a time when bankers have been hard-pressed to increase deposits because of fierce competition, some of them are looking at health savings accounts as a new path to growth. But so far, few New Jersey banks are offering them.

Account holders pay no federal income tax on the money they put into the health savings accounts if they use them only to cover deductibles and copays. They can also be used for health products and services that qualify.

About 5 percent of America's insured have health savings accounts, according to Information Strategies.

States with high penetration rates -- between 5 percent and 7 percent -- include Texas, Florida, Wisconsin and Illinois. In New Jersey, New York, Rhode Island, Hawaii and Vermont, fewer than 2 percent have them. The main reason is that premiums on high-deductible health plans offered in New Jersey and other low-penetration states are high when compared with those in many other states, said Donald Mazzella, an Information Strategies executive.

In New Jersey, "insurers have not made the policies very attractive to employers or employees," Mazzella said.

Also, New Jersey is one of several states that doesn't provide a state income tax exemption for health savings accounts. That doesn't seem to have a bearing on penetration rates, said Mazzella. States with higher penetration, such as Pennsylvania and Wisconsin, also don't provide exemptions.

Nationwide, the number of health savings accounts is expected to reach 8 million this year, with about 18 million insured. The dollar amount in the accounts is expected to top $13 billion by year's end, according to Information Strategies. In 2006, there were 8.7 million insured and 3.6 million custodial accounts holding about $5.1 billion.

The average account size by the end of the year will be about $1,700, and those accounts that have been in existence for two years or more will average around $4,400.

Banks have also been helped because the government is increasing limits on how much tax-exempt money can be saved in health savings accounts.

According to Independent Community Bankers of America, a trade group, more than 600 banks are offering health savings accounts, which the group expects will grow to between 15 million and 25 million by 2010.

Two River Community Bank in Middletown started offering them on May 1 and new accounts have "exceeded expectations," said W. Michael Schutsky, senior medical lending officer. He did not offer details.

Schutsky said the bank decided to introduce the product at the request of an insurance broker who had local clients with health savings accounts in online banks. The broker wanted to give clients' employees the option to switch to an institution with a local, bricks-and-mortar presence, he said.

The rates the bank offers on health savings accounts are 2 percent for balances less than $10,000, 3 percent for balances between $10,000 and $25,000, and 4 percent for larger balances. Individuals need $1,100 to open an account, and a family needs $2,200, according to the HSAfinder.com.

Other banks in New Jersey that offer the accounts include Valley National Bank, Sussex Bank and OceanFirst Bank, Mazzella said.