Fall 2006 / No. 69
Beating the Banks to the HSAs
When IRAs
were first introduced, insurers seemed to be in an ideal position
to capture much of that business. But we underestimated its
size and the ferocity with which banks and investment firms
would pursue it. A similar story can be told about 401ks.
We aren’t
underestimating the potential of the HSA market, especially
in terms of potential deposits. Press releases have touted
the coming flood of assets, transaction fees, administration
fees, etc. But will insurers get their share? Will they be
competitive at all?
One insurer
has decided to waive set-up/admin fees for a brief period if
the client purchases their HDHP from them. This is an interesting
approach.
If the ultimate
goal is to gather those assets, aren’t insurers best
able to compete against banks by eliminating the fees banks
must charge (and spreading that cost over additional products
that must be purchased as a part of the package)?
All else
being equal, why buy from several institutions and pay fees
when you can get the same funding vehicles from one institution
without the fees? It looks like insurers are in an ideal position
to capture much of that business. But didn’t I just say
that about IRAs and 401ks?
For
more information on HSAs and how they might fit in your business,
call Eastbridge today at (860) 676-9633. |
