As a recent entrant to the Health Savings Account market, Patelco Credit Union’s HSA service has grown into a thriving program.
The Opportunity
In the fall of 2005, the concept of offering HSAs was introduced at a Patelco Board Planning Conference. The board seized the opportunity with resounding approval and by January 2006, Patelco’s HSA program was up and running.
The need for a highly developed HSA program fell in line with the benefits of offering the service. Credit union advantages include member growth, the opportunity to instill long term relationships, and serious deposit growth potential.
The Plan
Patelco looked at many companies to build the right program and eventually chose a data processor because they already had a good relationship with the HSA broker. Early on, their main consideration was to keep it simple.Already a complex consumer product, the HSA account needed to be easily explained, implemented, and maintained. By packaging the account with an interest-bearing checking account featuring, a debit card, checks, online viewing, and bill pay really hit the mark with members.
Initially, offering the best product meant paying a higher dividend than your competitors. Patelco went one step furtherin addition to offering one of the best rates in the nation (5.12% APY), they waive all fees in the first year; second year fees are among the lowest in the nation. The credit union also offers My Medical Control (MMC), a personal management tool that gives members the lowest charge available for their submitted bills.
The Results
The credit union’s marketing efforts include prominent placement on Patelco.org, strategic placement in their monthly newsletter, and limited direct mailings to existing members. In addition, Patelco attracted new members working with health insurance brokers to market the account and connect with employers offering high deductible health plans. In just one SEG visit, Patelco representatives recruited all 600 employees to the credit union’s HSA program.
In late 2006, the Patelco HSA program includes $2.5M in deposits with a goal of $7M by the end of 2007. Since that point, Patelco’s HSA accounts have grown to over $55 million in outstanding balances as of mid-year 2009. New members make up 75 percent of Patelco’s 1,500 HSA accounts.