The following infographic highlights HSA growth opportunity for third party administrators. Since 2011, Health Savings Account (HSA) adoption has grown nearly 400 percent.infographic-hsa-growth-opportunity-tpas_061121
Health Savings Accounts (HSAs) – A Growth Opportunity for TPAs
Sicen 2004, HSAs have skyrocketed in popularity. They are now the second most popular tax-advantaged account next to Flexible Spending Accounts (FSAs). As HSA-qualified high deductible health plans continue to grow, third party administrators have plenty of opportunity to jump into the market.
- 52% of large firms (200 or more workers) offered an HSA-qualified HDHP
- 19% of small firms (199 or fewer workers) offered one
- Only 24% of covered workers were enrolled in an HSA-qualified HDHP in 2020
There is plenty of opportunity for HDHP and HSA growth.
HSA Growth from 2011-2020
- 2011: 6.8 million accounts
- 2012: 8.2 million accounts
- 2013: 10.7 million accounts
- 2014: 13.8 million accounts
- 2015: 16.7 million accounts
- 2016: 20.0 million accounts
- 2017: 22.2 million accounts
- 2018: 25.1 million accounts
- 2019: 28.3 million accounts
- 2020: 30.2 million accounts
- 2023: 36+ million accounts (projected)
Reasons Why TPAs Should Enter the Market
- Financial safety net: HSA administration can provide TPAs with an added layer of financial security
- Higher client satisfaction: Banks may offer HSA services for free, but what does the account owner get with the free service? In most cases, they get an HSA-coded account and not much else
- Easy administration: HSAs can be much easier to administer than FSAs, HRAs, or other tax-advantaged plans. With that in mind, you can offer your expertise and a higher level of service without changing much, if anything, about how you do business
How TPAs Are Poised to Take Advantage of HSA Growth
- Knowledge: 69% of employees don’t understand their benefits. As a benefits expert, TPAs have a prime opportunity to educate employees, grow their value to employers, strengthen their reputation with brokers, and increase account adoption
- A Better User Experience: A TPA can provide a top-notch user experience to their employer clients and participants with online enrollment, online contributions, electronic claim storage, mobile app, and options to self-certify (or administer yourself).
- Investing options: Many banks that offer HSAs do not offer an investment option. An HSA solution should feature investing services, including educational materials, pre-selected portfolios, and more.
- Inherent Business Acumen: Think about how you currently charge your employer groups for FSA, HRAs, and other accounts. You can use the same pricing model for HSAs. A per employee per month (PEPM) pricing model is common.
DataPath, Inc. creates cloud-based, all-in-one HSA management solutions for third party administrators.