The Coming Wave of HSA Investments

HSA Consulting Services authored a white paper sponsored by Avidia Bank.  The paper addresses investing through your HSA account for long-term medical costs -a hidden gem inside HSA accounts that is likely to see rapid growth in coming years.

Health Savings Accounts have been around more than ten years, but are just now beginning to be used to their full advantage. Currently, nearly 20 million Americans are covered by an HSA-qualified plan that enables them to fund their healthcare with an HSA. However, the vast majority of HSA Owners does not invest and miss the most powerful feature of their HSA.

HSA investment growth is bound to accelerate due to account demographics alone and focused education could throw gas on the fire. We have analyzed the Devenir numbers and project even faster growth, predicting that HSA investments could grow to $11.5 billion by 2017 and to $40 billion by 2020, averaging just north of 50% per year compound annual growth. The reason is three-fold: First, demographics of account growth will bring millions of newly opened accounts into the prime investment range in the next several years. Second, market growth inside accounts helps assets grow faster than bank assets earning historically low interest rates. Third, HSA investment education is much better than in the past and may strongly accelerate as more investment firms and advisors enter the space.

HSAs offer investment professionals the opportunity to help clients with trusted expertise in the increasingly critical arena of health care planning and spending. By studying the concept and creating partnerships to offer a top notch program to your clients, you can set yourself apart in your firm and show others how to create a valuable extension to the retirement savings plans of your firm. Many advisors bill themselves as retirement experts, but few offer insights into this powerful investment tool tied to a pressing need for most in our society: how to address health costs and plan for a healthy future.

HSA Consulting Services offers custom projects to help financial advisors, banks and investment firms learn how to make the most of the HSA market.

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