Bank On It: HSA Competition Rising

Posted by Merrill Matthews in HSAs, Health Care on Jan 26th, 2009 | no responses

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In response to the changes in the banking industry, Celent has followed up on its initial June 2008 report with a new report.

According to Celent, "the need to compete in the HSA market is intensifying, as a way [for banks] to grow deposit bases and to remain relevant in a future where health care banking products will increasingly be in demand."

The latest report is based on data from January to July of 2008 provided by 15 banks representing approximately one-half of the HSA market. Below are some of the key findings from the report:

• From January to July 2008, the number of HSAs increased 22 percent, while during that same period the total account balances increased 40 percent.
• From December 2005 through July 2008, the compound annual growth rate for HSAs was 86 percent.
• From January 2008 to July 2008, the average HSA balance increased from $1,400 to $1,553.
• For the most part, monthly fees are beginning to decline. In the individual HSA market, the average monthly fee decreased slightly from $2.93 in January 2008 to $2.84 in July of 2008.
• Most banks do not charge setup fees for HSAs, and many banks that do charge fees are increasingly waiving them.

(Thanks to Roy Ramthun, Council for Affordable Health Insurance visiting fellow)

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