A Florida credit union recently introduced a new health savings account product for its members and employees who have high-deductible health plans.
Power Financial Credit Union in Pembroke Pines, Fla., added the account to its product suite after beginning to offer high-deductible insurance for its employees.
"We realized we were sending our employees to a bank to offset this," said Gail Hanlon, vice president of support services for the $481 million credit union.
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Health savings accounts were created as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. An HSA works with a high-deductible health plan that provides comprehensive health care coverage at a lower cost. Once the deductible is met, the plan begins paying medical benefits according to the benefit design. Contributions to the accounts are pretax, any interest earned is tax-exempt and withdrawals are tax-free as long as the money is spent on medical expenses.
Power Financial had wanted to offer health savings accounts to its staff but didn't have enough employees to justify the cost, so the credit union decided to introduce the product to its members and SEGs as well.
"We realize that escalating medical costs coupled with a crippled economy means many businesses will be considering a high-deductible health care plan to reduce benefit expenses," said Allan Prindle, president/CEO of the credit union. "We are always looking to add products that meet our members' needs and simplify how they conduct their financial transactions. The flexibility of our new health savings account puts our members in greater control of their health care savings. It also allows for employers to offer this benefit to their employees without incurring any startup costs or management fees."
At present, the credit union has only rolled out the product to its staff, and is now beginning to make members aware of it.
"Our focus will be with our SEG groups or potential new SEG groups," Hanlon said. "We're approaching it to the employer to let them know we are local and they can deal with a local institution. Many times the HSAs are not in Florida. Right now it has been rolled to our business development team, who have set up appointments with their SEGs' annual health roll-outs, talking to those employees about those roll-outs. The existing ones we are contacting, and any new leads for SEG groups we are giving presentations to employees and to HR staff first. This is a selling point to add to their demonstration to new groups."
To open a health savings account, a Power Financial employee must be enrolled in the high-deductible health plan. The 55,000-member CU also offers its employees a plan that does not have a high deductible but has a higher monthly premium.
"Most, if not all, that had health savings accounts in other places opted to move them to us," Hanlon said.
She declined to disclose the cost of introducing the accounts and said it is too soon to estimate an ROI.
"We're looking at anything for noninterest income," she said. "We look at the health savings account as a source for that, but it's really more of a benefit factor for members or new SEG groups, or those who may not be happy with who they are currently using. It's mainly a new account-builder-a new relationship-builder with employees in our area."
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