Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

A Bank's Strategic Guide to HSA Investment Opportunities

866 views

Published on

With the rise of the high deductible health plan, the health savings account has seen a meteoric rise as an option not only for employees to better manage their healthcare dollars, but to invest these dollars for future use. Banks that offer or administer HSAs have an opportunity to grab a piece of this market, enhancing relationships with employer customers and account holders.

With nearly 19.7 Million Americans participating in a high-deductible health plan, and an estimated 30 Million participants by 2018, HSA assets will grow with it.

According to the Devenir Research Midyear HSA Report, Health Savings Account assets totaled $30.2 billion stored in 18.2 million accounts for the period ending June 30, 2016, and are expected to reach $36.4 billion in the next year. These numbers will grow even further, as Devenir currently projects that by the end of 2018 the HSA market will exceed $50 billion in HSA assets held among over 27 million accounts.

Knowing that within the next two years, there will be roughly 9 million more accounts and $20 billion in new assets, the employers looking to offer plans including HSAs and employees looking to put money into them will be looking for a partner in order to help secure and manage the money put into these accounts. This creates a relatively untapped opportunity for banks to expand their product offerings to meet future demand.

Did you know that HSA providers collectively generate $750-850 million in revenue from HSAs per year—and the number is only going to increase? The increases will not only come as a result of a higher number of accounts being opened, but also due to a currently underutilized strategy for account holders: HSA Investment.

As many account holders are still learning about the true benefits of tax-advantaged HSA investment, helping these account holders to learn about the benefits of HSA investment can open your organization up to more trust and more opportunity to help account holders to invest wisely.

Money goes into the account tax-free, earnings accrue tax free, and money can be taken out for qualified expenses tax free.

Banks that take advantage of the HSA opportunities can recognize the following advantages:

Expanding Business by attracting new account holders, developing and expanding relationships with employer customers, and taking in new deposits.
Growing Revenue from interest generated, increasing interchange, and non-interest income.
Leveraging the Momentum of the Growing HSA Market by capitalizing on new accounts being opened at a rapid pace and increasing deposits per account by educating account holders of the value of HSAs.
Offering one of the most needed services by helping account holders recognize the importance of HSAs not just as an vehicle for medical costs, but a solution for healthcare in retirement.
Capitalizing on something that’s quickly becoming the de facto vehicle for healthcare savings.

Published in: Business
  • Be the first to comment

A Bank's Strategic Guide to HSA Investment Opportunities

  1. 1. A BANK’S STRATEGIC GUIDE HSA OPPORTUNITIES GROWREVENUE Increase Interest Income HSAs more popular than ever for supplementing retirement savings 34% - of American workers have no savings set aside for retirement2 4 in 10 people do not have access to retirement plan at work3 Only 22% are very confident that they will have enough money for a comfortable retirement3 X10 59% Individuals need to save 10x their salary to retire comfortable at age 674 245K A 65 year old couple who retired in 2015 needs nearly $245,000 to cover medical bills in retirement4 34% 22% OFFERSOLUTIONSTOADDRESSYOUREMPLOYER&ACCOUNTHOLDERNEEDS Administering HSAs as a new or enhanced revenue opportunity Few people with an HSA are aware of the ability to fund their healthcare in retirement3 Most tax-advantaged vehicle out there for saving: contributions are pretaxed tax free, money grows tax free, and if it is used for qualified medical expenses, the withdrawal is also tax free.5 TAX ESTABLISHTHOUGHTLEADERSHIP HSAs are quickly becoming the standard for healthcare savings Attract new account holders Expand relationships with employer customers through offing an HSA Grow deposit base with sticky HSA deposits EXPANDBUSINESS By Rethinking your Deposit Capturing Strategy Expand your existing account holder relationships with an additional product Retain account holders with additional valued products; preventing them from looking at your competitors Increase Non-Interest Income Increase Interchange +22% HSAs are growing at a 22% clip year over year1 +25% HSA deposits are growing at a 25% clip year over year1 Over 17 million HSAs open at the end of 2015. The number of HSA account holders is projected to increase by 13 million new accounts by 20181 30 Million (Est.)2018 2015 LEVERAGEHSAMOMENTUM Untapped growth opportunity through HSA availability and education $54B $54 billion in HSA deposits across 30 Million accounts projected by 20181 17 Million HSA providers collectively generated $750-$850M in HSA revenue per year1 Visit today to learn more about how Healthcare Trends Institute can help you simplify the business of healthcare. www.healthcaretrendsinstitute.org © Copyright 2016 Healthcare Trends Institute Sources: 1.DevenirGroup 2.SocialSecurityAdministration 3.ThePEWCharitableTrusts 4.Fidelity 5.AvidiaHSAConsultingWhitePaper

×