Thursday, April 14, 2005
Kiplinger's reports on improved investing options for HSAs
[Kimberly Lankford, "Choice Comes to Health Savings," Kiplinger.com, April 2005.]
As consumers begin to build up sustantial assets in their health savings accounts, financial institutions are stepping up to the plate to offer better options on what to do with the funds:
Folks who can afford it pay their out-of-pocket expenses with non-HSA money, just so they can leave their tax-sheltered accounts untouched. One hitch: Until recently, HSA investing options were severely limited. When the Pirtles opened their HSA, most plans offered only fixed-rate accounts paying a puny 2% to 4%. Few allowed mutual fund or stock choices, primarily because balances were small and many people needed to have the money available to pay their medical bills. But now that HSA owners are accumulating thousands of dollars, they're demanding better long-term investments.
And the market is responding. A handful of companies now let you invest HSA money in funds or directly into stocks, and several major banks and investment firms are planning to enter the HSA business soon. "Within a year, the majority of the trustees and administrators will have an investment option," predicts Dan Perrin, executive director of the HSA Coalition and publisher of the HSA Insider newsletter.
Several big banks are entering the HSA business and are gradually expanding their investing options, too. Mellon Financial Corp. has paired with several health insurance companies (including many Blue Cross and Blue Shield plans) to provide an HSA, which currently offers a fixed account and three Dreyfus mutual funds. "We will be adding to that this year, and we're looking to offer a full brokerage option down the road," says Steve Hooper, director of HSA product management. JPMorgan Chase offers its HSA in conjunction with Cigna, several Blue Cross and Blue Shield plans, and other large insurers. It allows investments in mutual funds as well as a fixed account, and it plans to beef up its offerings this spring.
Both Wells Fargo and Fidelity plan to introduce HSAs for individuals within about a year. "I think there's going to be continuous evolution in the product, and we're not done seeing enhancements," says Brad Kimler, a senior vice-president at Fidelity.
Meanwhile, eHealthInsurance will soon offer a menu of HSAs from several companies -- some paired with health insurers and others available separately. It already offers a plan with thousands of mutual funds and full brokerage options.
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
[Kimberly Lankford, "Choice Comes to Health Savings," Kiplinger.com, April 2005.]
As consumers begin to build up sustantial assets in their health savings accounts, financial institutions are stepping up to the plate to offer better options on what to do with the funds:
Folks who can afford it pay their out-of-pocket expenses with non-HSA money, just so they can leave their tax-sheltered accounts untouched. One hitch: Until recently, HSA investing options were severely limited. When the Pirtles opened their HSA, most plans offered only fixed-rate accounts paying a puny 2% to 4%. Few allowed mutual fund or stock choices, primarily because balances were small and many people needed to have the money available to pay their medical bills. But now that HSA owners are accumulating thousands of dollars, they're demanding better long-term investments.
And the market is responding. A handful of companies now let you invest HSA money in funds or directly into stocks, and several major banks and investment firms are planning to enter the HSA business soon. "Within a year, the majority of the trustees and administrators will have an investment option," predicts Dan Perrin, executive director of the HSA Coalition and publisher of the HSA Insider newsletter.
Several big banks are entering the HSA business and are gradually expanding their investing options, too. Mellon Financial Corp. has paired with several health insurance companies (including many Blue Cross and Blue Shield plans) to provide an HSA, which currently offers a fixed account and three Dreyfus mutual funds. "We will be adding to that this year, and we're looking to offer a full brokerage option down the road," says Steve Hooper, director of HSA product management. JPMorgan Chase offers its HSA in conjunction with Cigna, several Blue Cross and Blue Shield plans, and other large insurers. It allows investments in mutual funds as well as a fixed account, and it plans to beef up its offerings this spring.
Both Wells Fargo and Fidelity plan to introduce HSAs for individuals within about a year. "I think there's going to be continuous evolution in the product, and we're not done seeing enhancements," says Brad Kimler, a senior vice-president at Fidelity.
Meanwhile, eHealthInsurance will soon offer a menu of HSAs from several companies -- some paired with health insurers and others available separately. It already offers a plan with thousands of mutual funds and full brokerage options.
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
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