Financial Firms Not Trumpeting HSAs Loud Enough

The Financial Research Corporation (FRC) said in a news release thatUMB Bank, JPMorgan Chase, and the Vanguard Group were among “a minority” of firms doing a good enough job in HSA promotion by creating destination Web sites or co-marketing the accounts with HSA providers.The FRC’s study found that most top-tier financial institutions have been slow to match the product support of the small providers.

Selected key findings from the research report include:

• Although FRC estimated that HSA assets will grow from $4 billion at year-end 2007 to $15 billion by 2010, it has downwardly revised its HSA asset projections and is now adopting a conservative growth projection in place of its previously moderate projections.
• HSA providers are offering more attractive investment options beyond FDIC-insured accounts, with a number of providers having rolled out mutual fund-based offerings in 2007.
• Product risk, such as the high deductible in the insurance plan, and legislative risk remain two of the largest impediments to HSA product growth.

“HSAs can provide part of a successful consumer strategy to prevent the significant drawdown of retirement savings during a health care crisis,” said Lynette DeWitt, FRC’s Research Director of Sub-Advisory Markets, and the firm’s lead HSA researcher, in the announcement. “We believe that financial institutions should take a dual-pronged health care planning strategy when assisting their customers in meeting retirement health care needs. HSAs provide part of that solution, and it will be hard for financial institutions to advance to the second, more sophisticated, step of health care planning implementation if those institutions aren’t first supporting HSAs as an initial step.”