Bank of America’s health savings account business rose 34% with the addition of 50,000 new accounts last year, as it also integrated that business in its institutional retirement business.
That growth comes as the bank has seen health savings accounts attract the most growth of its health benefit plans. The firm’s health savings accounts currently have more than $300 million in account balances among almost 200,000 total accounts. Other parts of that business also include health reimbursement arrangements and flexible spending accounts.
Bank of America’s tally of customers for its health benefits accounts include more than 2,000 corporations and more than 600,000 individuals.
“This year was significantly faster paced growth than what we’ve seen,” Bank of America Merrill Lynch Health Benefit Solutions Executive Justin Raniszeski said of the health savings account growth, which has typically topped 20% in previous years.
That growth is in line with what the health savings account industry is seeing overall, which Raniszeski said he attributes to three factors. Those factors include high deductible health plans and health savings accounts becoming a more standard offering from employers; increased employee awareness of health savings accounts and their ability to save; and the subsequent control of health care costs for employers and employees.
“We don’t see any of those drivers diminishing,” Raniszeski said. “We think that the more employers continue to offer the products, the more employees will become aware of it and the behavior change will continue. We’re excited about the next three to five year growth projections here.”
The growth also comes as Bank of America moved the health benefit plan business from its consumer to its institutional business last fall. The institutional business also includes defined benefit, non-qualified deferred compensation and equity compensation programs.
The merger of Bank of America and Merrill Lynch several years ago contributed to growth in the health business right away, allowing the firm to immediately help existing institutional clients who wanted to add health savings benefits, according to Kevin Crain, head of institutional retirement and benefit services at Bank of America Merrill Lynch. The new integration of the health benefit business into the institutional division should only help the current growth along even more, Crain predicts.
“It will lead to more growth, I’m sure, of our retirement client base,” Crain said. “It further ties us into those clients, and it will strengthen our retention overall of the retirement client base that we have.”
Lorie Konish writes for On Wall Street.