HSA Bank, a division of Webster Financial Corp., is gearing up for a major push into the large-employer market for health savings accounts, according to the bank's executives.
The expansion could help increase the number of individual accounts from the current 213,000 to 500,000 within two years, and 2 million within seven years, the executives said. The bank holds $505 million of assets in its health savings accounts and another $70 million in linked brokerage accounts.
HSA Bank's plan revolves around partnerships with insurance carriers that are responding to growing demand for health savings accounts from businesses and institutions that employ 1,000 or more people, said Kirk Hoewisch, president of the Sheboygan, Wis., bank.
"We've had informal relationships with carriers," he said, "but there has never been any level of partnership like what we are talking about right now."
HSA Bank has mostly catered to smaller employers until now, reaching them through its relationships with insurance agents and other intermediaries. But the company could not ignore the drumbeat of carriers seeking partnerships with it in order to pursue larger employers, said Kevin Roberts, vice president of national sales.
Vicki Lundy, the director of consumer-driven health plans for BlueCross BlueShield of South Carolina, said that large employers had resisted the HSA model after its creation in 2003. When it came to nontraditional health insurance alternatives, such employers often preferred health reimbursement accounts, she said, but they are now warming to HSAs.
BlueCross BlueShield of South Carolina is one of several carriers that are HSA Bank partners. The two companies are integrating their customer service technology and other areas to provide seamless service to employers.
"We've been using HSA Bank for quite a while," Ms. Lundy said. "We are further integrating with them to meet market demand for HSAs and to be on the cutting edge."
HSA Bank began its large-group push last year with a multimillion-dollar project aimed at integrating its services with those of insurers. The technology, most of which will be rolled out this summer, gives insurers access to employees' account information in real time, said James Peterson, HSA Bank's assistant vice president of business development. And it coordinates claims adjudication with payments out of custodial accounts, he said.
Mr. Hoewisch said that HSA Bank had catered primarily to the individual and small-group market because of its heritage as a specialist in medical savings accounts, an HSA precursor that was not designed for large employers.
Much of the demand for the integrated platform has come from Blue Cross Blue Shield insurers, the HSA Bank executives said. The bank has a dozen relationships with such carriers and various sorts of contracts with about 300 health plans and third-party administrators overall, they said.
Large employers have been warming up to health savings accounts for two or three years, according to Gregg Larson, the national product leader for health savings accounts at Affiliated Computer Services Inc. Dallas' ACS, through a partnership with Bank of New York Mellon Corp., is one of the largest HSA providers.
The companies have long had partnerships with insurance carriers to reach employers, including many in the large-company bracket. Like HSA Bank, they are investing heavily in technology that streamlines signup and other aspects of the accounts.
"The large guys are becoming increasingly sophisticated," said Mr. Larson. "They are demanding more sophisticated enrollment models."
As employers offer high-deductible health insurance plans, it is crucial that their employees open the tax-advantaged health savings accounts designed to go with them, he said. Making it easy to sign up for both at the same time is high on employers' priority lists, Mr. Larson said.
"Almost 100% of large employers are seeding these accounts, and they can't put money in an account that doesn't exist," he said.
HSA Bank, Bank of New York Mellon, and ACS are plunging ahead with their investments despite the possibility that the next president could try to reform the health-care system. HSA Bank's Mr. Roberts said that at least two enrollment seasons are likely to pass before any reform would be adopted and, by then, 10 million Americans could be covered by HSA-eligible plans.
That critical mass could make it "too late to undo what's been done," he said.
