Employers, Banks Should Prepare for Renewed Interest, Growth in HSAs

Andi Atwater
The Wichita Eagle
January 11, 2008

Despite a slow start, the market for Health Savings Accounts is ripe for rapid growth, and banks and employers should prepare for that, a new report shows.

Celent, a financial research and consulting firm in Boston, predicts HSA growth will hover between 40 and 50 percent over the next five years, resulting in 12.5 million accounts by 2012.

Part of the reason HSAs have not proved as popular as expected is because providers underestimated what a "monumental" undertaking it was to transition to a high-deductible health plan and educate employees about them, the report found. Providers, Celent researchers found, wrongly assumed employees would naturally embrace self-direction in health care.

The report also predicts the HSA business for many midsize to large banks will evolve into a high volume, low to moderate value business. Banks will feel pressure to lower fees in order to retain customers, build balances and acquire new customers, researchers said.