A TPA for your HSA – Beyond the Acronyms

Health Savings Accounts (HSAs) continue to gain popularity as more and more health care consumers realize their un-matched tax benefits. The fact that consumers are increasingly utilizing HSAs to save and manage health care expenses into retirement means that relationships with HSA providers are becoming long-term ones. Thus, the choice of the right HSA provider is now more important than ever.

Whether an individual opens an HSA on their own or their employer partners with an HSA provider to offer HSA accounts to its employees, a third-party administrator (TPA) is a valuable resource in managing the relationship with the HSA provider. TPAs offer a wide variety of resources and tools that make the management and utilization of HSA dollars easy and maximize the benefit of the account.

What should individuals and benefits brokers consider when looking for a TPA? Of course, there are many factors, but some of the most important are:

• Account Access. Does the TPA provide highly functional web and mobile access to the HSA? Can the account holder make deposits, view cash and investment balances, pay providers, request distributions, and manage debit cards using these tools?
• Fund Availability. How quickly are deposits available for spending? For employer-based benefits, will funds be available to spend on payroll day?
• Custodial Bank. The TPA will work with one or more banks that hold the HSA funds. Consider the custodial bank’s rating and reputation. Of course, the bank should be FDIC insured.
• Claims Management. Does the TPA’s system allow for the storing and management of eligible expense documentation – either for reimbursement now or in the future? Is the TPA integrated with health care providers so that this kind of information is uploaded automatically?
• Debit Card. Does the TPA provide for the use of a debit card to access HSA funds for direct payment to providers without the hassle of requesting reimbursement?
• Investment Opportunities. What options are available for growing HSA balances? Most HSAs provide at least a small interest rate on balances. Others allow for investment of HSA dollars in mutual funds. There are a variety of minimum balance and fee requirements for these options, so consider them carefully.
• Customer Service. For employer-based benefits, will the employer be assigned a dedicated benefit consultant and account manager? Will individuals have convenient access to live, knowledgeable representatives to help them with questions about funding, eligibility, participation, and claim management?

Carefully considering the items above and making the right choices when choosing a TPA will make the HSA a financially smart way to manage health care expenses and will make its utilization a good experience for consumers.