Health Savings Accounts continue to grow in popularity, but most banks are missing out on capturing these valuable deposits.
As the consumer-directed benefits landscape evolves, banks must reassess their approach to growth by engaging employers and account holders.
Like many TPAs, EBPA built its reputation on high-touch service, strong compliance, and long-standing client relationships. But as their COBRA platform aged, it became more of a liability than an asset. System errors, reporting headaches, and weak support from their vendor created daily operational challenges, limiting their ability to grow. After an unsuccessful upgrade attempt, EBPA recognized the need for a new direction. They needed a modern COBRA solution—one that could streamline operations, scale with
Flexplan Administrators, headquartered in Tulsa, Oklahoma, is a national third party benefits administrator providing administrative services for employee benefit programs under IRC and Section 125. As Flexplan sought to grow its business, the TPA faced several challenges due to using different administration platforms for CDH and COBRA management. The multi-platform approach limited its ability to provide integrated services and grow its HSA business with financial institutions. In 2022, Flexplan transitioned its business to DataPath to
The Internal Revenue Service (IRS) recently announced updated HSA annual contribution limits. An important part of consumer-directed healthcare, HSAs offer participants enrolled in HSA-qualified (HDHP) health plans a way to save on taxes while setting aside money for out-of-pocket healthcare expenses for themselves and their families.
Since 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.
Unlike an FSA or an HRA, both of which are owned by the employer, HSAs are owned by the individual. This means that the account owner funds the HSA, spends the money (within IRS regulations), earns interest, and chooses whether or not to invest the money. Most importantly, the individual keeps the account (HSA portability) should their employment status change due to job loss, changing company, or retirement. Employers may also choose to contribute to the HSA, but the account owner keeps the funds.
Since they were enacted in 2003, Health Savings Accounts (HSAs) have become an integral part of the consumer directed healthcare landscape for those with a high deductible health plan. One of the chief benefits of having an HSA is that account holders can use that money to pay for a wide range of eligible medical expenses for themselves, their spouses, and their tax dependents.
HSAs have been around for almost two decades and continue to exhibit long-term adoption growth. However, many TPAs have been cautious about adding this account to their services menu. How can TPAs capitalize on this expanding opportunity and enter this consistently growing market?
Some TPAs have been hesitant to enter the HSA market because they either do not want to compete with banks or believe that HSAs require a lot of additional work. However, there is still plenty of opportunity ahead. Those who have not yet capitalized on this still growing market can leverage their knowledge, skills, and business acumen to capture new revenue.
Health Savings Accounts (HSAs) can be a great investment in one’s personal healthcare and financial future. Their versatility, and the fact that these accounts can be kept for life, mean that HSA owners need to adopt strategies for building and using the accounts to their full potential.