PFPC Inc., the securities services arm of PNC Financial Services Group Inc., is considering a new technology feature for its health savings account offering as it markets the product through the wholesale channel.
A potential enhancement to the product would enable participants to pay medical bills online directly from the account Web site, said James S. Gandolfo, newly appointed as senior director and vice president of global business development at PFPC in Wilmington, Del.
"We're looking at advances in HSA technology capabilities," Mr. Gandolfo said.
Mr. Gandolfo's hiring by PFPC to spearhead marketing for its health savings account was announced Monday. He was the president and chief executive officer of Wilmington Brokerage Services Co., a registered broker-dealer and subsidiary of Wilmington Trust Co.
Though participants in PFPC-developed health savings accounts currently can use debit cards to pay out-of-pocket medical expenses, technological advances might let them make electronic payments directly from their accounts to doctors and other medical providers, said Jeffrey Felser, a senior vice president and group product manager in the parent PNC Bank's treasury management division.
PFPC introduced its health savings account in 2004. The turnkey product offers a cost-effective solution, Mr. Gandolfo said, for insurers and large employers looking to tap in to the health savings account market. "It's given our partners the opportunity to participate in the HSA market unfettered by many of the expenses typically associated with that market," he said.
The subsidiary of Pittsburgh-based PNC is marketing the product solely on a wholesale basis, Mr. Felser said. "We're more of a wholesaler targeting our services to insurers and large companies that may be self-insured and are looking for a third-party administrator," he said.
PFPC is not pursuing the retail channel because high-deductible health-care plans are still new and investors are seeking guidance from their employers and insurance brokers before contributing to health savings accounts, he added.
The company mainly uses the treasury management division's internal sales team to market the accounts, though PFPC also has partnerships with a handful of outside wholesalers, Mr. Gandolfo said.
The Delaware company has a competitive advantage over rival health savings account companies in that PFPC was able to leverage its existing subaccounting platform when it introduced its health savings account, he added. The company was thus spared the infrastructure expense required of other firms entering the HSA market.
PFPC's health savings account features a hyperlinked participant Web site that is integrated with the corporate sponsor or underwriter's Web site. Plan participants can gain access to their account information without realizing they have left the sponsor's Web page, Mr. Gandolfo said.
The company's health savings account also features custom-branded participant communications materials, along with Web and telephone-based customer services. PFPC supplies full-service custodial and record keeping services.
The product uses an open architecture platform with more than 5,000 mutual fund investment choices for savings in the accounts, Mr. Felser said. PFPC can help customers with fund selection due diligence, and participants can gain access to their account information online and create personalized asset allocation models.
