I think it would be beneficial to get a dialog going pertaining to recommending HSA's and to see how the more seasoned indies approach this topic.
When you sell a HSA do you typically recommend that the client set-up the account with the insurance carrier or an outside bank?
Do you think a client would be better to use the HSA in a more aggressive investment approach via stocks and/or bonds or should they rely upon the minimum return offered by insurance companies?
------------------------------------ "Tell me and I will forget. Show me and I will remember. Involve me and I will understand." Confucius
HSAs are not an investment in my opinion. The health plan picks up 100% of all expenses after the deductible - so you only need to worry about funding the account portion up to your deductible.
Saying that, you can use the money for other things like vision and dental. Are you using $20,000 of vision and dental? Then why have $20,000 in your HSA?
You don't want to be in a situation where you'll incur a penality if you need to money. If you really want to invest then don't do it with the narrow options a HSA administrator gives you.
You can also back-fund HSAs. All that means is if you only have $3,000 in the account but get hit with $7,000 of eligible expenses you can pay the $4,000 with a personal check, then back-fund the HSA to take the deduction. That's allowed. Since that's allowed I need no reason for clients to fund their account year after year - eventually accruing $20,000 - $50,000? Doesn't make any sense.
HSAs are not an investment in my opinion. The health plan picks up 100% of all expenses after the deductible - so you only need to worry about funding the account portion up to your deductible.
Saying that, you can use the money for other things like vision and dental. Are you using $20,000 of vision and dental? Then why have $20,000 in your HSA?
You don't want to be in a situation where you'll incur a penality if you need to money. If you really want to invest then don't do it with the narrow options a HSA administrator gives you.
You can also back-fund HSAs. All that means is if you only have $3,000 in the account but get hit with $7,000 of eligible expenses you can pay the $4,000 with a personal check, then back-fund the HSA to take the deduction. That's allowed. Since that's allowed I need no reason for clients to fund their account year after year - eventually accruing $20,000 - $50,000? Doesn't make any sense.
So based on your recommendations a client should fund the account to their OOP max and use the remaining savings in future years to invest in other avenues?
Ok so is it better to use a bank or the insurance company to open an HSA account? I know Unicare used Chase bank, but now they just tell us to find our own bank because they found out that chase was charging some higher than normal fees for the account!!
For HSAs, I recommend my clients do it with BofA or Wells here in CA as both banks will do the HSA account and most if not all of my HSA clients have accounts with one of them (plus they are very plentiful here so no need to travel to great a distance).
That being said, Blue Cross CA (rumor has it) which would include Unicare since it is their's under Wellpoint, may be providing Chase with upfront information on HSA client subscribers. I have not had this happen yet, but have read I believe on NAHUnet that Chase has contacted HSA subscribers to set up accounts and have all of the private information on the client ahead of time. Can anyone confirm this has happened to them??
That being said, Blue Cross CA (rumor has it) which would include Unicare since it is their's under Wellpoint, may be providing Chase with upfront information on HSA client subscribers. I have not had this happen yet, but have read I believe on NAHUnet that Chase has contacted HSA subscribers to set up accounts and have all of the private information on the client ahead of time. Can anyone confirm this has happened to them??
Carriers do not offer the HSA. That is only available through banks. Some carriers have a working relationship with banks for the HSA and make the admin a bit easier. Some, like UHC, own a bank (Exante) and can give the consumer a bit more flexibility.
But it is up to the consumer to decide which bank to use for their HSA.
Now that Lumenos is part of the Wellpoint/Anthem family I would imagine Blue clients would be encouraged to use them (Lumenos).
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We are getting several new IFP and Group Lumenos plans in CA starting 4/1 through Blue Cross CA. Nifty ideas on some of them including earning dollars for healthy endeavors.
I generally allow my clients to choose their HSA bank, but was a bit concerned hearing that they may have been providing info to Chase. Again, I have no first hand of that except what I saw via NAHU site.
Blue Shield of California has a working relationship with Wells. However I tell people to look into opening their HSAs with the Patelco Credit Union as they have the highest interest rate and the lowest yearly fees that I've found.
In GA, Blue has not figured out how to price the HDHP. They had a relationship with WF prior to the Lumenos deal, but it (WF) didn't work out very well.
GA Blue's have a lot of issues right now they may take some time to work out. I don't see them being a mainstream player in the HSA market, particularly on the individual side, in the near future.
Fee's & interest rates are nice but most of my clients are more interested in ease of administration. Having a carrier with a seamless relationship between the HSA & HDHP is more important at least for now. Once they have their HSA fully funded (equal to the SIR of the HDHP) they can diversify and parse the funds into other avenues if they so desire. But getting over that first year or so and all the bookkeeping is beyond the scope of what many clients want to tackle.
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