AFCM Interviews HSA Bank President, Kirk Hoewisch
[Continued from Page 1]
AFCM: How does HSA Bank set interest rates on Health Savings Accounts?
KH: Rates are indexed to the prime rate. Our daily interaction with agents and customers indicates that we have the right mix of fees and rates. We aim to offer the most complete package. We have the most knowledgeable customer service agents. Our sole mission is Health Savings Accounts, as our name suggests, and we don’t do anything else. We have 90 employees completely devoted to HSAs, a product we’ve offered since 1997.
AFCM: Why did you decide to offer brokerage accounts?
KH: Agents requested it. Once we offered brokerage accounts, our business took off.
AFCM: Does HSA Bank offer online account management?
KH: Yes. We offer an on-demand transfer of funds to their bank. Digital images of checks are available on the Web, too, and, in the future, we may offer analysis of the customer’s Health Savings Account using charts and graphs, though we have to comply with government privacy regulations. We’re also working on adding easier enrollment options and the customer will be able to go as far back in his or her account history as when the account was opened. A Web site redesign is already in process and it’s just a matter of time. The HSA debit card already shows how a customer’s money is used.
AFCM: What type of training do you provide?
KH: We train workers on the concept of the Health Savings Account first and we have hired a woman with top training standards who worked for AT&T. It’s an ongoing education. Also, our own staff will soon have high-deductible insurance—HSA Bank will contribute $500 to each employee’s Health Savings Account, so HSA Bank employees will know the benefits of the products first-hand.
AFCM: Will Mr. Yocum’s role be eliminated?
KH: Yes. He is ready to retire.
AFCM: What’s the HSA Bank marketing philosophy?
KH: Neutrality. We don’t have insurance subsidiaries. There’s no conflict of interest. We don’t plan to get into the insurance business. We’ll just do a great job with your Health Savings Account. Also, we’re hiring people who like the excitement of coming in on the ground floor of something huge.
AFCM: Why do you suppose more banks haven’t created HSA products?
KH: They didn’t have the volume of business with the Medical Savings Account and there were too many government restrictions. They backed out of the market due to lack of interest.
AFCM: Does HSA Bank offer its products in all 50 states?
KH: Yes. Going by a map, the Midwest is especially strong for us and we have many customers in the southeastern United States and in Texas. Most customers are male, but when it comes to using the account, it’s mostly women. The average customer’s age is in the late forties, though many of our young customers were previously uninsured. I’ve done presentations at machine shops and the young guys really like the concept. Professionally, we have software companies and many small businesses—including people who work at taverns, dairy and wheat farms. Other customers are lawyers and doctors, CPAs, dentists.
AFCM: Do you aim to compete with Assurant Health, (formerly Fortis Health), the nation’s top health insurer for HSAs?
KH: We do have a number of Fortis agents [who sell HSAs for HSA Bank] and we receive a good chunk of business from their agents. Before United Healthcare purchased them, Golden Rule’s agents referred business to us. So, we have good relations with insurance agents and we welcome new partnerships while we continue to compete.
AFCM: You were chiefly responsible for using a strategy of getting insurance agents excited about free market ideas, developing the Web site and achieving success in a niche market. How did you gain new customers?
KH: Through word of mouth. It was awesome. Back in 1998, without any real marketing, we bought 3,800 names of agents and we personally called them. Of those, only 400 were interested in receiving information. Out of that database, we now have over 12,000 agents referring business to us. That was my initiative. We started revenue sharing with the agents and that helped. Not all of them wanted it and they could pass the savings along to the customer. Meanwhile, we provided them with free marketing—through our brochures, which we would distribute at trade shows, such as the National Association of Alternative Benefits Consultants. There were some agents in that original 400 who would call us back later and say enrolling certain customers in MSA-compatible health insurance prevented those customers from terminating business.
AFCM: What was the biggest challenge in getting national customers?
KH: Name recognition. Our name is neutral—our focus is HSAs. You know what you’re going to get. Some [health insurance] carriers don’t want to have their brand diluted by, say, teaming with a major bank [to offer the companion Health Savings Account to the carrier’s insurance policy]. We aim to have a brand following so that you know what you’re getting when you open an account. Look for us at health conferences, in talk radio interviews and in published advertisements.
AFCM: Did Webster Financial approach HSA Bank for a merger or vice versa?
KH: They approached us. We had already grown and we had reached the stage that banks were bidding [to buy HSA Bank]. During the process of sending information packets, they called and wanted to know how they could partner with us. Mr. Yocum said the timing was good and that we were for sale and he asked if they were interested. [Webster Financial] said they had been looking and we sent them information.
AFCM: How has being bought by Webster Financial affected HSA Bank?
KH: We’re still HSA Bank. We do not share client insurance information. We have our own legal and marketing staff—so we’re pretty autonomous. It’s our niche and they’re going to let us run it.
AFCM: How do banking regulations affect business?
KH: There are regulations on banking from A to Z. For example, regulations govern the float and return of checks, whether a deposit is a government check, whether the depositor is a customer or a non-customer, whether the deposit is made by mail or through an Automated Teller Machine (ATM). It’s very complex.
AFCM: Does HSA Bank accept government grants?
KH: No. Asking for government help is not my philosophy.
Scott Holleran, Editorial Director
Copyright © 2005 Americans for Free Choice in Medicine. All rights reserved.
For reprint permission, contact AFCM.