Bankers Predict Blockbuster Year For HSA Accounts In 2006

With 2005 ending on a high note, many bankers who currently offer HSAs expect 2006 to be a blockbuster.

Initial results from Information Strategies Inc.’s (ISI) 2005 year-end survey shows a significant jump in HSA accounts with more than 1.1 million reported from the 100+ banks surveyed.

What’s more, except for one bank, all expected enrollments to double or triple in 2006. The one reluctant bank said it was in the field only for a short time and had no track record to draw upon in predicting 2006.

At the same time, two emerging trends in fees and costs were also surfaced in the study.  In the first, average set-up fees slipped below $25 per account from a year-ago figure of $48.
The second trend was that average balances reported by banks soared to more than $1,500 above the estimated $1,100 projected just last November.

The ratio of family versus individual accounts rose to 3-1 by banker estimates.

The number of individuals covered under these accounts was estimated to be more than 2.4 million, while it is estimated that another 10% of covered HSA insured individuals had not opened an account.

Small Business, Individuals Driving HSAs

The number of community banks and credit unions reporting results tripled from December 2004.  Further, all banks indicated strong demand from individual account holders were driving the program.

Many banks indicated they hoped to drive sales by obtaining one or two large corporations as clients and adding large numbers in a single event.  At the same time, they were getting accounts from smaller companies and from individuals choosing them over the custodian being suggested by insurers.

More detailed data will be available in ISI’s new study of HSA accounts available on February 3rd. For details on how to obtain a copy, write customerservice@hsafinder.com.