As the cost of health care continues to rise, it becomes more and more difficult for businesses to provide low-cost, full coverage health insurance to their employees. In recent years, many businesses have chosen to provide a High Deductible Health Plan (HDHP) to their employees. Now credit unions have the opportunity to provide these employees with a Health Savings Account (HSA) to supplement this plan.
But, just what is a Health Savings Account? Simply put, it is a tax-advantaged savings account to be used for medical expenses. Let’s take a brief look at the advantages:
- There are tax deductions when a person contributes to an HSA.
- HSAs allow a person to lower health insurance premiums by switching to a high deductible health plan.
- Because an HSA requires a person to have an HDHP, it will protect him/her from high or unexpected medical bills…and the withdrawals are tax-free.
- An HSA allows people to use the money saved for qualified medical expenses or for future needs that may arise.
- Funds remain in an HSA from year to year; there are no “use it or lose it” rules which apply to this account.
- A person can earn money on the funds in an HSA tax-free.
- A person can control the way the funds are spent and invested. In other words, an individual can essentially choose his/her physician as well.
- An HSA is completely portable in that a person can take it with him/her wherever the future may lead.
What is your Business Development strategy for HSAs?
Think of the SEGs that belong to your credit union. Do they offer HDHPs to their employees? Are their employees in need of a tax-advantaged savings account to supplement this higher premium insurance?
Here are some ideas you can use to try to not only increase deposits using HSAs, but to establish a long-term relationship with members in your various SEGs:
Advertise HSAs through Human Resources and other professionals. Take the time to develop a strong relationship with the Human Resources professional or office manager responsible for implementing insurance plans at the SEG. Discuss opportunities you may have to distribute information about your credit union’s HSA or even develop a FAQ about HSAs in general through your discussions with this individual.
- Sponsor HSA seminars. What better way to share the benefits of HSAs than through a credit union-sponsored seminar. Take the opportunity to discuss the advantages of an HSA, focusing on some of the key features and benefits of your credit union’s product. Additionally, you may want to ask your “resident” financial planner or tax specialist to discuss the tax advantages of the account as that is truly one of the greatest benefits of an HSA.
- Articles in your SEG newsletter or other communication material. Whatever you communicate in regularly to your SEGs, whether a newsletter or e-mail bulletin, be sure to discuss the advantages of your HSA when applicable.
The Key is to Know Your Target and Know the Requirements
No matter how you decide to sell an HSA, it is critical that you know your target, making sure all the requirements for the account are there prior to talking to anyone about it. For example, be sure the SEG employees you talk to have an HDHP because that is the number one requirement needed to open an HSA. And, you may even want to focus more on the young, single adult (over 21 but under 30) who is responsible for his/her own insurance needs and is paid more than $50,000.
The bottom-line is an HSA is not for everyone, but it is a solid way for you to go after the “harder to reach” target of the young, single adult. Do the research necessary to offer the best product possible and sell it in the best way possible to the right target…you will then have guaranteed success.
Harland Educational Services is a full-service consultation firm providing solutions for staff and member education and research. For more information, go to http://www.harlandeducation.com, or call us at (800) 291-6117.