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.