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November 21, 2006
More Banks Offering Health Savings Accounts with Additional Benefits
The number of banks that offer Health Savings Accounts has more than tripled since the end of 2005, as more employees enroll in high-deductible health plans that qualify for a Health Savings Account. Nearly 1,100 banks now offer Health Savings Accounts, which allow consumers to set aside money tax-free for medical expenses.
Larger banks are "increasingly getting into the business, attracted by the lucrative combination of deposits, account fees and sales leads for mutual funds, and other investments generated by HSA customers," reports the Wall Street Journal.
According to the Journal, the "abundance of new Health Savings Account offerings is triggering competition that is helping to push fees lower and expanding the options for consumers to invest their savings." Health Savings Accounts typically accrue interest, but banks increasingly are offering other investment options.
Bank of America this week is expected to announce plans to introduce a new credit card in partnership with major health plans that will allow holders to earn rewards points that convert to cash for their Health Savings Accounts. In January 2007, customers will be able to invest their HSA balances in mutual funds offered by the Bank of America's Columbia Management arm.
In addition, JP Morgan Chase later this month will begin allowing individuals to enroll in Health Savings Accounts online, rather than solely through their employers. The bank also offers mutual fund investments to its Health Savings Account holders.
Experts say the "presence of big banks in the industry is expected to quickly spread awareness and hasten the adoption of Health Savings Accounts," the Journal reports. The total number of Health Savings Accounts by the end of 2006 is expected to grow to about 3.6 million with $5 billion in combined deposits, compared with 1.1 million accounts with deposits totaling $1.2 billion at the end of 2005, according to Information Strategies (Carrns, Wall Street Journal, 11/14).
At HSA for America, you can find more banks offering Health Savings Accounts: http://www.health--savings--accounts.com/admins.htm
Posted by Wiley Long at November 21, 2006 11:58 AM