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Advisors Speak Out on Health Savings Account (HSA) Benefits and Choosing the Right HSA Partner

Health savings accounts, or HSAs, are often utilized as spending vehicles to pay for current medical expenses. However, savvy account holders are increasingly taking full advantage of their unparalleled tax savings by using them as retirement investment vehicles. And as word gets out about the long-term value HSAs offer, perceptive advisors are adding them to their retirement toolkits as a piece of their comprehensive retirement strategies.

At HealthSavings, we are privileged to partner with many of these forward-thinking advisors as they use HSAs to help their clients build a happy, healthy future. Recently, we sat down with Jimmy McDonald from Channel Financial and Kristen Donovan and Andy Kowal from BAM Advisor Services to hear their thoughts on HSA benefits and get their tips on what to look for in an HSA provider.

Each advisor agreed on the importance of education in helping potential clients understand the benefits of HSAs. McDonald noted how even executives he’s talked to have thought unused HSA funds were forfeited at the end of the year, like with an FSA. Donovan and Kowal also mentioned the value of helping potential clients understand their projected healthcare costs in retirement. Once clients understand how much money they are likely to spend on retirement medical expenses and how much HSAs can help them save, HSAs become a very attractive option.

In addition, McDonald focused on the importance of teaching people how to use their HSAs well. While many people default to 401(k)s as their primary retirement savings vehicle, he noted that after obtaining all employer-matched funds, account holders are well-served to max out their HSAs before their 401(k)s. HSA contributions can provide better tax breaks (including FICA savings for employees and employers) and are completely tax-free when used for qualified medical expenses, making them more efficient savings vehicles than 401(k)s.

While many HSA account balances have not yet reached 401(k) levels, each advisor stressed the role of an HSA in deepening relationships with their clients. In particular, McDonald noted how introducing clients to a concept like an HSA, that nobody may have mentioned to them before, helps build trust and improve client retention.

As Donovan and Kowal put it, once you understand the strong benefits of HSAs, it’s evident that this should be a talking point that advisors cover with clients (both individual wealth management clients and employers). Once advisors decide to offer HSAs, though, they next must choose between a host of HSA providers as a partner.

For Donovan and Kowal, digging into the current advisor experience offering HSAs made them realize there had to be a better way than what the industry was typically providing. They were drawn to HealthSavings’ first-dollar investing ability, its array of low-cost mutual funds, and its independence from other financial or insurance companies. In addition, HealthSavings offers flexible compensation opportunities for advisors, as well as an intuitive advisor-specific portal and easy integration with partners like Orion.

For advisors who understand the long-term opportunity HSAs present for their clients, HealthSavings offers over 15 years of experience with investment-focused HSAs. With 5x higher account balances than industry average, we would be glad to partner with you on an investment-focused HSA offering. Learn more about our comprehensive HSA solution here or email us at advisors@healthsavings.com to get started.

Author: James Denison