HSA Investment: Untapped Opportunity for Investment Firms (Infographic)

Investment Firms and HSAs

Retirement. For many employees, the proposition of retirement poses a bittersweet response—employees are dreaming of the free time and freedom that comes from saying goodbye to the 40-hour work week, but dreading the day that the paychecks stop showing up. Will an employee have enough to cover expenses for the next 30 years? How much will he or she need to put away each year to ensure there’s money available later in life?

It’s a concern whether the employee is 25 or 55, and there is an incredible opportunity to address this challenge—one that can create a win-win-win for the employee, employer, and the investment firm that handles the investment.

Health Savings Accounts: Triple-Tax Advantaged Investments for Employees

The Health Savings Account, or HSA, has become an effective way for some employees with high deductible health plans to put pre-tax money (Individual: $3,400, Family: $6,750, with extra $1,000 catch-up contribution for employees 55+ in 2017) aside for certain out-of-pocket healthcare expenses including medical, dental, and vision coverage.

Since the passing of the Affordable Care Act, high deductible health plans have grown in popularity and will continue to do so in the wake of the 2020 Cadillac Tax. With the increase in HDHPs comes an increase in HSAs. With nearly 19.7 Million Americans currently participating in a high-deductible health plan, and an estimated 30 Million participants by 2018, HSA assets will grow with it, reaching an estimated $38 billion by the end of 2016, and over $45 billion by the end of 2017.

This exponential growth over the last decade (HSA assets totaled only $1.7B in 2006) has created an undeniable opportunity for account holders to invest their HSA contributions for future use and for investment banks to manage these investments (HSA providers collectively generate $750-850MM in HSA Revenue per year).

Infographic: Investment Firm’s Guide to HSA Opportunities

Pitching these investment opportunities to account holders should be easy, as the HSA is the most tax-advantaged option for employees looking to save for retirement, whose contributions reduce taxable income, whose earnings accrue tax free, and whose withdrawals (for qualified expenses) are not subject to taxation prior to the employee turning 65, and are taxed like IRA withdrawals for non-medical expenses after 65.

For investment banks, the opportunities exist for your organization to extend its product offering, grow revenue (and influence), and establish your role as a trusted partner through availability and education. Learn more from this infographic.

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