The information in this article is taken from a speech, "Where are HSAs Today? A Look at the Marketplace of Health Savings Accounts”, by John Robbins, Sr., at the DataPath Annual Conference in New Orleans.
The question DataPath keeps hearing is, “What is the Role of Plan Service Providers (PSPs) in the Health Savings Account (HSA) marketplace?” Before answering that, let's look at the three HSA models:
Carrier as Custodian. In this model, the High Deductible Health Plan (HDHP) insurance carrier also serves as the HSA custodian. To the carrier, being the custodian is simply a sideline to make the insurance more attractive.
Custodian Direct. In this model, the HSA is just another product to sell. The HSA custodian is independent of the HDHP carrier and provides its services directly to the Account Holder. The custodian relies on the Account Holder to get a qualified HDHP. To the Custodian the HSA is an individual account and not part of the “Group Plan”.
PSP-Focused. When the PSP enters the picture, the focus is now on service—services directly to the employer and the employees and, indirectly, to the carrier and custodian. This model is based on the philosophy that the employer and the employee need the expertise of an independent PSP to ensure compliance and to ease the administrative burden on Human Resources. It recognizes that the PSP can offer expertise, advocacy, flexibility, management, and autonomy.
The Plan Service Provider is the entity who can (with the help of DataPath's HSAToday program):
- Work with the insurance agent to design the right plan option(s) for the group.
- Understand how the HSA can work with a Cafeteria Plan.
- Implement the HSA in conjunction with an HRA or Limited Purpose FSA.
- Certify the eligibility of expenses.
- Perform Contribution Management to guard against over-contributions.
- Test to ensure § 125 compliance.
- Manage monthly contributions to the multiple custodians.
The HSA market is wide open! Get in on the ground floor with DataPath's HSAToday HSA Administration System. Check out www.myHSAToday.com, and watch for the October newsletter telling you the latest on HSAToday!
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