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Finding The Right Clients For Your HSA Product

Finding The Right Clients For Your HSA Product


For financial advisors, HSAs are powerful, yet underrated tools to build value in clients’ eyes and increase client lifespan. While many people only think of HSAs as ways to pay for current healthcare costs, they can also be invested to grow funds for medical expenses in retirement. By offering HSAs to existing clients, you give them a uniquely tax-advantaged way to save for future medical expenses, as well as brand yourself as a total retirement expert.

So which clients in your book in business should you start with? The three questions below will help you qualify your clients to see which are the most likely to implement your HSA.

Does the client currently offer employees an HSA?

These are your most qualified clients, and they should be contacted first. If a company already offers an HSA for their employees, rolling over or transferring their HSAs to your product is a simple process. You just need to convince them why your product is worth switching to.

If you’re offering an HSA from HealthSavings, you’re offering best-in-class investment choices to help clients grow their money for future medical expenses. In fact, you can even mirror your clients’ 401(k) or IRA fund lineups for a seamless investing experience. Make sure to ask if your client’s current HSA has an investment option; if their HSA is provided by a bank, they may not have the ability to invest. Or, they may have to meet cash thresholds in order to invest funds. On average, banks make 200 – 250 basis points on deposits, so there is little incentive for them to encourage HSA investing.

As a total retirement expert, you want to tell a different story. Healthcare expenses are only increasing; in fact, the average couple retiring at 65 in 2018 could face up to $400,000 in non-Medicare-covered medical costs. And if couples pay for that $400,000 from 401(k) funds, they’d pay an extra $134,000 once taxes are factored in. HSAs allow accountholders to pay for those retirement healthcare costs tax-free and save their 401(k) or IRA funds for other expenses.

Does the client have an HSA-qualified high deductible health plan?

Part of the eligibility requirements for making contributions to an HSA is being covered under a qualified high deductible health plan (HDHP). 85% of employers already offer a HSA-qualified plan, but ever-increasing healthcare expenses are forcing more employers to move that way each day. By switching to an HDHP, employers can reduce the rate of increase in future premiums, as well as keep premiums lower for employees. In addition, if the employer has a Section 125 plan, both the employer and employee save on FICA taxes for pre-tax employee HSA contributions.

If a client currently has or is considering an HSA-qualified HDHP, adding an HSA is a no-brainer. Both the employer and employee benefit as a result of HSAs’ unparalleled tax advantages, and employees have a robust way to build medical nest eggs for retirement healthcare expenses. Be sure to ask how many other health insurance plans are offered, as more options will likely reduce HDHP and HSA participation.

Does the client offer employees a rich benefits package?

If an employer offers a rich benefits package for employees, that can be a double opportunity. First, a comprehensive benefits packages shows the employer already wants to care for its employees. HSAs are one more way employers can look out for their people by providing a dedicated, tax-advantaged way to pay for medical costs. Second, by switching to HSA-qualified plans and offering HSAs, employers can reduce insurance premium costs (for themselves and their employees) and provide incentives for employees to become better consumers. Additionally, some of those savings can be given to the employees in the form of an HSA contribution.


Ready to add HSAs to your product lineup, give your clients unmatched tax savings on medical expenses, and become a comprehensive retirement specialist? Call us at (888) 354-0697 to get started or learn more here.

Author: James Denison