Wells Fargo & Co. has teamed with one of the largest small-business trade groups to sell medical savings accounts nationwide to the group's members and their employees.

The bank plans to offer medical savings accounts, which are tax-deferred savings accounts used to pay employees' out-of-pocket medical expenses, to the National Federation of Independent Businesses' 600,000 members nationwide.

"It's an alliance that makes a lot of sense and helps bring a new product to market," said Heather Martin-Maier, Wells Fargo senior vice president for the business banking group.

Wells Fargo's relationship with the National Federation of Independent Businesses is the bank's second such partnership designed to promote its services for small-business owners.

The San Francisco-based bank has a deeper and more established relationship with the National Foundation for Women Business Owners and promised to lend $1 billion to female entrepreneurs over three years.

Wells won't limit its sales of medical savings accounts to members of the independent businesses group; it is planning to promote the accounts to other small-business owners through its Internet web site, Ms. Martin-Maier said.

The accounts, which are linked to insurance policies with deductibles as high as $4,500, are designed for self-employed people or businesses with fewer than 50 employees. Both business owners or employees can contribute to the accounts.

"The NFIB is excited to offer its members the opportunity to participate in a well-managed, affordable health care program," said Fred Holladay, chief operating officer for NFIB Member Services Corp.

The medical savings accounts were introduced in January in a four-year pilot project of the Internal Revenue Service. The IRS' sign-up period is limited to the first 750,000 accounts nationwide.

"We intend to take advantage of the opportunity at hand and we are confident it will be successful," Ms. Martin-Maier said.

Wells Fargo's medical savings account also allows account holders to open a brokerage account once the balance in the savings account reaches $2,500.

Mellon Bank Corp. and Fifth Third Bancorp offer similar medical savings accounts that can be invested in the banks' proprietary mutual funds.

After the account holder reaches age 65, the money can be used for any purpose. If the money is withdrawn for nonmedical purposes before that time, it is subject to income tax and a 15% penalty.

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