The House Republicans' massive budget reconciliation bill includes a significant expansion of health savings accounts, positioning Webster Financial and UMB Financial — a pair of regional banks that are among the largest HSA providers in the country — for a big win.
The
Even if the House-backed expansion gets scaled back in whatever tax bill ultimately gets passed, Stamford, Connecticut-based Webster and Kansas City, Missouri-based UMB each stand to gain more HSA customers, more fee revenue from debit interchange charges and more low-cost, sticky deposits, according to analysts.
The health savings account market is already a large component of Webster's business strategy, which includes a focus on nontraditional deposits. The $80.3 billion-asset company operates a subsidiary known as HSA Bank, housed within its health care financial services division, that held $9.2 billion of deposits, or roughly 13% of the bank's total deposits, as of March 31.
The provisions in the House bill — which, among other things, would expand HSA eligibility and increase contribution limits — could open up a huge pool of potential new clients, said Luis Massiani, Webster's president and chief operating officer.
Some estimates of the potential market expansion as a result of the House-passed legislation run as high as 20 million people, on top of the roughly 61 million people who already have HSAs.
"It's not every day you get that opportunity," Massiani told American Banker.
The House bill, which passed 215-214 on May 22, includes several changes for HSAs, which were first codified in late 2003 and have emerged as a popular vehicle for managing health care costs.
HSAs, which are typically offered by employers as part of high-deductible health insurance plans, allow account holders to put a portion of their salaries into an account on a tax-free basis. Then they can use the money to pay for qualified medical expenses. Some account holders with larger HSA funds choose to invest those dollars to help build a retirement cushion.
As part of the House-passed bill, HSA eligibility would expand to include those covered by Medicare Part A, among others who are not currently eligible. The new rules would also double the annual HSA contribution limits from $4,300 per individual and $8,550 per family to $8,600 per individual and $17,100 per family, and allow HSA funds to be used for qualified sports and fitness expenses, such as gym memberships and other fitness activities.
Webster and UMB are among the few banks involved in the HSA market. Bank of America, Associate Banc-corp and First American Bank also operate in the space, according to a Morningstar report from last fall.
Both Webster and UMB have been longtime players. Webster entered the HSA market in 2004 when it acquired Eastern Wisconsin Bancshares. Webster sold off Eastern Wisconsin's retail operations and retained its HSA Bank subsidiary at a time when HSAs were still a nascent business.
Webster has grown the business organically and through acquisitions, including the
UMB had an existing HSA business and grew it in 2022 by
At the end of March 2025, UMB's health care services business, which includes HSA accounts, had $3 billion of deposits, making up 6% of its total deposit base.
An HSA expansion under federal law would certainly be a benefit for UMB, according to Nathan Race, an analyst at Piper Sandler. But even without it, the bank's HSA segment is poised to grow, given its recent
"That's a client base that didn't have the opportunity to utilize an HSA platform," Race said. "That's probably the lowest-hanging fruit when you think about revenue synergies."
Banks scored well in the tax bill out of Ways and Means this week, with wins on S Corps and rural lending, but have so far lost out on credit union taxes and additional burdens on payments competitors.
Brian Hutchin is the director of health care services at the $69 billion-asset UMB and the treasurer of the American Bankers Association's HSA Council. Hutchin has been in Washington, D.C., this week, lobbying to preserve the HSA provisions.
"Our urgent focus is on the reconciliation package, and our hope is to see some of the largest changes for HSAs in our history being implemented," Hutchin said in an email. "Currently, it is an all-hands-on-deck situation."
Ben Gerlinger, an analyst at Citi Research, covers both Webster and UMB. In a recent research note, he projected a $104 million annual net interest income boost for Webster if the House bill becomes law.
"This thing could really spiral and be a benefit," Gerlinger said.
Neither the analysts nor Webster's Massiani are concerned that HSA expansions would put downward pressure on either Webster's or UMB's businesses, including in the form of potential increased competition from new entrants.
The need for a sophisticated technology platform and a team on the ground to sign up more employers are likely barriers, they said.
"This isn't something you can just build overnight," Massiani said.
