The Convergence of Health Savings Accounts and 401(k)s: Vision or Illusion?

HSAs are evolving into longer-term tax-advantaged investment accounts for future health expenses.

Boston, June 6, 2019 – While HSAs are spending accounts for most employees in the U.S., the number of HSA investors and the assets in their accounts are catching the attention of retirement plan advisors in the defined contribution/401(k) marketplace who are betting on HSA investments to boost their existing low-margin businesses. Forward-looking retirement plan advisors and traditional financial advisors are starting to take a strategic look at the investment case for HSAs, noting the role that HSAs can play within a broader wealth management and retirement savings portfolio.

This report explores how the chips will fall for HSA investments and what a merged health 401(k) product may look like for HSA providers, bank and nonbank HSA custodians, and third-party administrators. It is based on interviews conducted from Q2 2018 to Q1 2019 with 50 executives from health benefits brokers, retirement plan advisors, financial advisors, broker-dealers, 401(k) record-keepers, HSA providers, and custodians.

This 36-page Impact Report contains 15 figures and three tables. Clients of Aite Group’s Wealth Management or Health Insurance service can download this report, the corresponding charts, and the Executive Impact Deck.

This report mentions ADP, Aetna, Alegeus, American Funds, Bank of America Merrill Lynch, Bluestar Retirement Services, Charles Schwab, Cigna, DataPath, Devenir, Diversified Fund Advisors, Empower, Fidelity, Franklin Templeton, HealthEquity, HSA Bank, Lively, Optum Bank, Paychex, Nationwide, TD Ameritrade, TRowe Price, Ubiquity, UMB Bank, UMB Investment Management, UnitedHealthcare, Vanguard, Voya Financial, and WEX Health.

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