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#698451 - 03/08/07 03:06 PM HSAs are they worth it?
Branb3 Offline
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Branb3
Joined: Apr 2003
Posts: 55
Michigan
We are a small community bank under $100 million and are considering offering HSA's. For those of you who offer them, have you seen a benefit from offering these accounts? Any recommendations on where to start?

Dazed & Confused

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Deposits and Payments
#698510 - 03/08/07 04:03 PM Re: HSAs are they worth it? Branb3
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Unless you plan on creating a large portfolio - IMHO - they are not worth it. The training, the forms, the high level of maintenance required, the information reporting requirements, etc. out weigh any profits. However, if you want to round out your product offering with a loss leader - that is another issue. Typically, regardless of what many people claim, most accounts are funded then drawn down over the course of the year and few accounts result in any significant on-going balances.
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#698541 - 03/08/07 04:24 PM Re: HSAs are they worth it? rlcarey
Branb3 Offline
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Branb3
Joined: Apr 2003
Posts: 55
Michigan
Interesting. One option we have is to partner with a local insurance company that will private label the product for us. I don't know the specifics, but basically, they get the insurance and admin of the HSA piece and we get the deposits. They claim all we will have to do is hold the account. Any feedback on that option?

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#698628 - 03/08/07 05:38 PM Re: HSAs are they worth it? Branb3
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Yes - You get to hold the account and train, maintain and manage the correct forms, perform the high level of maintenance, fulfill the information reporting requirements. I guess it depends on whether or not the volumes are going to justify the expenses.

You also may want to review the call report instructions to see if the insurance company would be defined as a deposit broker for proper call reporting of the deposits.
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