Ohio Bank Offers Health Savings Accounts

Published May 1, 2008

Huntington Bancshares, Inc., a $54 billion regional bank holding company headquartered in Columbus, Ohio, is moving into consumer-driven health care.

The firm has announced it is making Health Savings Accounts (HSAs) available to the businesses that make up the majority of its clientele, so those businesses can offer HSAs to their employees.

The bank says it hopes to help make health care more affordable for businesses while helping consumers cut their taxes and boost their personal retirement savings.

Analysts applauded the move as a smart one for Huntington, saying HSAs provide an incentive to save for health care expenses and can help restore health care choice and control to Americans.

“Offering HSAs will help Huntington Bancshares relieve the burdensome costs and administrative inefficiencies of health care delivery for businesses and individual consumers,” said Diana Ernst, a health care policy fellow at the Pacific Research Institute in San Francisco. “These tax-free accounts are part of a growing reform movement called consumer-driven health care.”

Benefiting Workers, Businesses

Businesses stand to benefit from HSAs in several ways.

Since HSAs enable consumers to pay larger deductibles with tax-free savings, health insurance premium rates can be lowered. Employers could find offering HSAs along with high-deductible health insurance, and funding the HSAs on behalf of their employees, more cost-effective than maintaining a standard corporate coverage plan.

Huntington unveiled the program in January, including a self-enrollment option through which the firm will provide “all of the informational materials, answer employees’ questions, do all of the paperwork to set up the accounts, and provide year-end tax reporting documents for employees,” to help businesses save on time and administrative costs.

“Many employers are looking for ways to restrain the rising costs of providing health benefits to their workers,” said Devon M. Herrick, Ph.D., a senior fellow at the Dallas-based National Center for Policy Analysis. “This is a way for employers to empower workers to be better health care consumers and allow them more control over their health care dollars.”

Improving Consumer Choices

Americans with low-premium, high-deductible policies can open HSAs, and employers and employees alike can deposit pre-tax dollars into their accounts, Ernst notes.

“A nationwide study by Aon Consulting and the International Society of Certified Employee Benefit Specialists of 470 employers found the number of employers offering HSA-eligible health insurance plans is on the rise, with 37 percent offering them, up from 28 percent of employers in 2006, and 22 percent in 2005,” Ernst said.

Huntington provides its HSA policyholders 24-hour-a-day customer service and online enrollment. According to a news release by the company, Huntington’s interest-bearing health savings accounts, which have an annual fee of $36, “include a check card and unlimited check writing, as well as online access to account information and no monthly set-up or withdrawal fees.”

Ernst said, “Despite the government constraint [that] a mandatory high-deductible plan be paired with these tax-free accounts, HSA holders are changing consumer behavior for the better.

“We have reason to believe that the adoption of HSAs will only increase with the passage of pending federal bills to make them more flexible and feasible for all Americans,” Ernst added.

Sanjit Bagchi, M.D. ([email protected]) writes from India.