Often the success of a product requires two things: a product that meets or replaces a market need and, equally important, a market’s acknowledgement that it needs the product. This requires marketplace conditioning and response, in the right order. An example of a great product in the financial services industry today that the marketplace is confused about is the Health Savings Account (HSA), which has received some scrutiny in the press as of late. Upon evaluation of the issue, one finds that most of the challenges with the HSA are not about the product itself, but rather from a lack of knowledge of its functionality.
Today, we can compare the HSA with the initial introduction of the 401K. As many of us may recall, the 401K experienced a rocky start. Information about how to open a 401K came in a large packet, filled with fund prospectuses, and employees were suddenly being asked to be financial wizards at a time when most individuals did not do their own investing. It took time for the 401K to find the success it has today, which happened by providing the right method of education that provided the necessary level of understanding.
The market needs to know why an HSA account is important to them today and for their planning for the future; how health care costs can be more under their control; and realistically how they might benefit financially from having an HSA account. Then the consumer needs to know how to open an account and how to manage it once it is open.
The similarities with the 401K and HSA are that the products are often tied back to the employer, who provides retirement and medical benefit plans to their employees. The employer’s medical benefits plan typically provides a cafeteria plan that today more prevalently includes a High Deductible Health Plan (HDHP) and HSA. The difference with the addition of this plan is that the HDHP has a lower premium plan and includes an employee-owned health savings account. These HSAs can be provided by a financial institution, and the account holder monitors their spending on the account.
As one can see, there are many audiences involved in the education process, and it is important that the education provided is specific to the various individuals who will be looking at HSAs — the employer, employee, consumer, member, broker, or wealth manager. They need to understand what it means to them and the ROI associated with providing, offering, or owning this type of account. Credit union employees also need to be educated on the product as they are at the front lines of member inquiries.
Getting the Word Out
One of the keys to a successful product launch is disseminating knowledge. Credit unions have the opportunity to work with their sponsors, SEGs, and members to educate them on the relevance of managing their health and medical costs; it also reinforces that credit unions are on call to provide HSA products and solutions. It is an opportunity with financial rewards for employers, the consumer, and the depository institution.
HSAs are here to stay. Fiserv, a leading provider of products and services in both the financial services and health insurance industries, has developed a fully scalable, end-to-end health banking solution that enables all stakeholders – consumers, employers, employees, and financial institutions – to reap the full benefit promised by HSAs. Fiserv representatives will be at NAFCU’s conference July 18-20, booth #325 –Drop by to see how we can help your institution take advantage of this lucrative opportunity.
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