If we are considering offering HSA, what do we need to know? Any registration/filing required with the IRS to offer these? Disclosure requirements we must comply with? Other compliance requirements of these accounts? Also, do banks set these up like an IRA? And do you typically see these offered through a retail department or a trust department within the bank?

Thank you in advance for any information you are willing to provide!

Consider signing up for this on-demand webinar: https://www.bankersonline.com/webinars/hsa0815

I'm interested in information on the HSA's as well. Where you able to get anthing?

Over the years I've put up a couple posts asking for banks who think they make a profit on these accounts to respond. One poor soul responded that they had a large number of them and considered it to be a successful product. Another respondent pointed out that was not my question, the issue is whether they are profitable.

These are great for the taxpayer, no question.

However, for the bank, they are low balance, high activity accounts; if you do not charge fees, they are guaranteed to be dogs. My belief is that the more of them you have, the more money you are probably losing.

Ken is more than correct on this issue. If you are doing this just as an ancillary product in which profit is not the motive, then make sure you are fully aware of this going in. These accounts end up being very labor intensive and require significant training of all involved personnel from the frontline to the operational support groups.

Once these accounts are open, they are virtually impossible to get rid of. You don't just send a notice to the customers that you are no longer going to offer them.

Any hope of making these profitable is to develop significant relationships with large employers that offer these accounts to their employees and to properly price them. If you are only going to offer these on a retail basis, you will never crack into any volume at all and profitability will be allusive at best.

In the 90's I was at a bank that had a HSA customer base of around 9,000 accounts and we could never show that they ever really made a profit.

We offer them. We are a small, one branch bank and it's a ridiculous product for us to offer. They are not simply a headache, they are a migraine. Are you going to offer a debit card? If so, you will need to license a new & separate BIN, also, we have to use a third party to manage them (similar to IRAs), the current/prior years deposits can get screwed up, training costs to train new accounts staff to understand them, does your forms vendor have the proper forms/disclosures?

Just a few things to think about.

Thanks for all the responses. Seems as though this will/would be a lot of work for the bank. For those of you who do currently offer them, do you charge a fee for these accounts, and if so, how much? Are there any limits on charging fees on HSAs? Thanks.

One development to watch for is legislation. Congress has just started on its attempts to overhaul/revise/jettison the Affordable Care Act, and one of the forays into that battle includes some significant changes to HSA laws. A couple of bills have been introduced, and it's possible that something could happen to make HSAs more attractive to both taxpayers and financial institutions. Now might be a good time to sit back and watch what happens before adding a new product that's been marginal, at best, for banks.

Team,

There are no limits on the fees you can impose. If the investment is a bank deposit, then TISA applies and fees are subject to both initial disclosure and advance notice of changes. Personally, I would be more interested in activity vs. periodic fees.

thanks again yall! I appreciate your posts

We charge an upfront fee when opening a HSA. If management wants to waive this fee for a company, is there any problems with TISA?