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www.HartfordBusiness.com April 3, 2017 • Hartford Business Journal 5 HSAs poised for growth, despite health reform's failure By Gregory Seay gseay@HartfordBusiness.com H ealth savings accounts (HSAs), finan- cial conduits through which millions of Americans pay their health-related expenses, will likely stay in high demand despite Congressional Republicans' failed attempt to broaden their use and access as part of federal healthcare reforms, experts say. One proposal under President Don- ald Trump's and Congress' failed Ameri- can Health Care Act, which didn't garner enough support to pass the House, was to double accountholders' annual HSA con- tribution limits, to $6,500 for individ- uals, and $13,100 for families. That move, along with broaden- ing how HSA funds could be used, was seen as a potential boon for financial institutions like Waterbur y-ba sed Webster Finan - cial Corp., that are major players in marketing and managing the tax-exempt accounts for consumers. Despite the legislative setback, however, HSA industry officials and analysts remain bullish about the future growth of health savings accounts, particularly as workers continue to shoulder more of their own health expenses. "With or with- out the repeal and replace of Obam- acare we expect a 20 percent organic growth rate of HSAs in 2017 and anticipate the market growth continuing for the foreseeable future with HSA plans representing a sig - nificant percentage of the over 170 mil- lion commercial- ly-insured in the United States," said Charles (Chad) Wilkins, president of HSA Bank in Mil- waukee, Wis., which is owned by Webster. According to human-resources consul- tancy Mercer's latest nationwide survey, half of companies with 300 or more work- ers offer HSAs to their employees, up from less than one in five in 2010. Devenir, a Minneapolis firm engaged in HSA account investment and research, esti- mates HSA deposits will reach $37.6 billion this year and eclipse $44 billion in 2018, up from just $1.6 billion in deposits in 2006. Wilkins, who has run HSA Bank since 2014 and is a Webster Bank executive vice president, said the last time there was this much demand for HSAs was when details of Obamacare were being hammered out and the law was signed in March 2010. HSA Bank is one of the nation's oldest and third-largest issuer of HSAs, with more than 2 million accountholders and $5 bil- lion in assets. "We have some good momentum with regards to HSA accounts,'' Wilkins said. "We obviously think it's a great solution for the majority of the population.'' In 2015, Webster acquired JPMorgan Chase Bank's HSA business, adding $1.3 billion in deposits at the time, anticipating an explosion of the account's popularity. HSA Bank works closely with health- plan partners to offer its HSA accounts to individual and corporate plan members, Wilkins aid. Also, many customers open accounts directly with HSA Bank. Webster Bank's offices also market HSA accounts. HSA evolution Health savings accounts first emerged in 1997, then known as "medical savings accounts,'' into which consumers contribut- ed dollars that could be used later to cover health-plan deductibles or other qualified care expenses, said Devenir founder-Presi- dent Eric J. Remjeske. But a key drawback was that any unused MSA contributions during the year were for- feited. In Dec. 2003, as part of the Medicare Act overhaul, changes were implemented, primarily the shedding of the "use-it-or-lose- it'' feature that allowed consumers to roll over into the next year their unused contri- bution, said Remjeske. Along the way, MSAs were renamed "health savings accounts.'' Over time, consumers have increasing- ly embraced HSAs, particularly with the growth of high- deductible health plans, which force individuals to pay more out of pock - et for care. Meantime, many households, particu- larly wealthier ones, use their HSAs as retirement-savings accounts because contributions are tax free. Interest on HSA accounts, too, are tax free. HSAs also have raised consumers' awareness of health- treatment options, Remjeske said. For instance, HSA account- holders are more apt to visit a private outpa- tient clinic when they have a sniffle, rather than seek much more expensive emergen- cy-room treatment, "because they're using their own money.'' As part of the federal healthcare overhaul, HSA Bank and other account issuers were pushing, Wilkins said, to allow consumers to deposit their excess health-related tax cred- its, which would have been created under the Republicans' plan, into their health sav- ings accounts. That won't happen, at least for now, although Republicans still envision HSAs as a key aspect to reforming the healthcare system and making patients better consum- ers of care. n PDS has been meeting the needs of the construction industry since 1965. Our dedicated team of design and construction professionals welcomes the challenge of serving its past and future customers on their most demanding projects. Advance Auto Parts | Meriden, CT PDS served as Design Build General Contractor for this new Advance Auto Parts store in Meriden, CT. The building was an 8,000 square foot block wall facility with mainly large retail space along with restrooms, an overhead door and a loading dock. The project was completed in a fast track span of 5 months. Combined Project Size: 8,000 SF 107 Old Windsor Road, Bloomfield, CT 06002 (860) 242-8586 | Fax (860) 242-8587 www.pdsec.com DESIGN BUILDERS • GENERAL CONTRACTORS • CONSTRUCTION MANAGERS SPOTLIGHT ON: Retail PDS ENGINEERING & CONSTRUCTION, INC. THINK • PLAN • BUILD Charles (Chad) Wilkins, president, HSA Bank in Milwaukee, Wis. $0 $10 $20 $30 $40 $50 $60 2006 2012 2018 Investments Deposits Total Assets Total Health Savings Account Assets (in billions) S O U R C E : D E V E N I R R E S E A R C H REDEVELOPMENT OPPORTUNITY MONSON DEVELOPMENT CENTER – FOR SALE The sale and redevelopment of a portion of the former Monson Development Center presents an exciting opportunity to create a unique mixed-use development to support a mainly rural economy (and expanding light industrial economy) in the village-like historic Town of Monson. The Commonwealth of Massachusetts is seeking responses to the Request for Proposal (RFP) for the purchase and sale of a portion of this state-owned property. Please refer to the RFP for site tour and specific submission requirements. 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