An Insurance Producer's How-To Guide to Evaluating HSA Custodians

How do your clients want to be serviced? Is it mainly through the Web or email? Or is it important that they be able to speak directly to an account service representative if and when they wish? Many custodians have invested heavily in Web-based, interactive tools allowing online enrollment and acceptance of contribution and distribution requests. Account holders can go to the website and pull up account information 24/7, including statements and transaction activities. For those clients who want to talk to a live person, you should look at the custodian’s service hours and how readily representatives can speak with account holders. In both instances, it is important that the account holder have the tools they need to manage their HSA on their own time schedule.

4. Record-keeping

How skilled are account holders at keeping track of their qualified or non-qualified medical expenses? Do employees and their employers make contributions into the HSA? In an HSA, the custodian is responsible for tracking all contributions and distributions. However, the individual HSA account holder is responsible for tracking all the details. Depending on how the HSA is used, it is important that account holders have tools to easily track account activity. Some custodians offer a digital record-keeping service that allows account holders to maintain all of these records in an electronic file. This becomes a very useful tool if someone has a lot of medical expenses to track.

5. Contributions and medical expense payment options

Can clients make their initial and subsequent HSA contributions by check or electronic transfer? How easy is it to transfer assets from another custodian? When it comes to paying bills, does the custodian provide checks or debit cards? Can clients move money from the HSA to another account to reimburse themselves for qualified medical expenses? In today’s world, consumers want options, and the convenience of moving money electronically.

6. Investments

Do your clients want options beyond cash? Do some of these clients want the money in the HSA today to use in retirement? As HSA balances continue to grow, account holders recognize that unused funds can present an investment opportunity. While some custodians offer a simple bank deposit account, many now offer a more robust investment platform. Some offer a limited number of mutual funds, while others offer mutual funds, stocks, bonds, and CDs. If the custodian offers an account that integrates the investment account with the deposit account, it is especially convenient for the account holder. The custodian must have the ability and the experience to provide custodial services for the investments it offers. For many agents, an HSA with investment options may be an important factor in deciding which HSA is right for their clients.

Above all, it is important to work with an HSA custodian that is responsive to agents, employers, employees, and individuals. As an agent, it is important for you to be able to rely on that custodian for good service – and this is something that account holders will thank you for.

Reggie Karas is the senior vice president of the alternative solutions group at Millennium Trust Company. She can be reached at [email protected] or 630-368-5674.