Exante Financial Services has no problem stepping on traditional banks’ toes to increase its share in the health savings account market.
The Minnetonka, Minn., unit of Minneapolis’ UnitedHealth Group advertises itself as “the only financial institution 100% focused on health care.”
In the past year the company has used print ads, including one depicting a banker examining a patient, to drive home the point that customers should trust the health-care experts rather than bankers, said John M. Prince, its chief executive officer.
The strategy has been successful, as Exante is now approaching the leaders in the health savings account market.
Exante more than doubled its HSA deposits by taking over those of a sister company on July 1. The transfer from Golden Rule Insurance Co. raised Exante’s total to 200,000 accounts and deposits of $250 million, Mr. Prince said. Exante has declined to give the size of its HSA business, but Information Strategies Inc. of Palisades Park, N.J., had put the bank’s deposits at $98 million, in 151,000 accounts, as of April 1.
The boost puts the four-year-old company within striking distance of the industry leader, Webster Financial Corp. of Waterbury, Conn., which has HSA deposits of $275 million and an additional $32 million of linked investment accounts.
Exante’s new bulk brings it economies of scale, Mr. Prince said. The company is heavily invested in technology, and additional customers make the investment more cost-effective, he said.
“You’ve got to be a certain size to have enough wherewithal to keep investing in the business,” said Mr. Prince, who has described Exante’s annual technology investment as being in the tens of millions of dollars.
But the “main driver” was making Golden Rule customers’ experience better, he said. Mr. Prince said these customers now have access to Exante’s investment platform, and once their account balance surpasses $2,000 they can invest above that into Exante’s array of mutual funds.
Exante’s new customers can also now pay for medical purchases with a credit card; and their health-care providers can use a magnetic stripe card to call up eligibility information, link to their medical records, and more.
Exante has been growing organically by 5,000 to 15,000 accounts each month, Mr. Prince said. And it is planning to improve its product; it has set a January 2007 rollout for a single card combining health-care payment, information, and a line of credit that will let customers make health-care purchases and pay them off with their HSAs, Mr. Prince said.
“It’s a strategically aligned long-term strategy of blending health and wealth,” he said.
This fall the company plans to start offering completely electronic enrollment, with an integrated application for HSAs and the high-deductible health insurance plans with which they must be linked.
Other conveniences include a standing order option that allows customers to have their money automatically invested in the mutual fund allocation they choose. Less than 5% of account holders are using the investment, but that will probably increase as balances grow, Mr. Prince said.
Exante is aiming more broadly than the consumer market, however. It wants to make health-care transactions more efficient, Mr. Prince has said. In June, for instance, it introduced “real-time adjudication,” in which claims can be processed in 10 seconds or less.
Industrywide, HSAs had gathered nearly $2.1 billion of deposits, in 1.5 million accounts, by midyear, according to Information Strategies.
