Beyond financial technology-related challenges, partners also face the issue of providing consumers with information on procedures, providers and costs. "Whoever is planning to own the customer or manage the customer experience -- banks and insurers are tiptoeing around the issue because both want to do it -- they need to be able to provide the customer with the right information ... when the customer actually has a need," Baig says. "Neither banks nor insurers have good tools to help the customers make the decisions."
Given the need to act within a narrowing window of opportunity, banks and insurers may be well-served by relying on niche vendors such as WebMD (New York) or Subimo (River Forest, Ill.) to provide the necessary tools, Baig suggests.
Vendors also are seeking to bridge gaps on the payment-processing side. "To make all of this work, banks and insurance companies need to have new linkages and capabilities," asserts John Reynolds, president, Metavante Healthcare Payment Solutions (Milwaukee). "As you get into this space, you enter a gray zone between what banks and insurers do."
For example, some banks have sought to respond to consumer demand simply by creating interest-bearing accounts and labeling them HSAs. That is inadequate, Reynolds says, because, "In order to maximize tax advantage, most employers are looking for a combined product," such as an HSA/flexible spending account (FSA) suite.
HDHPs reduce premium costs, and associated accounts encourage employees to set aside pre-tax dollars. "In essence, it's part of a payroll reduction strategy," Reynolds explains. "The more pre-tax dollars are flowing to these products, the lower the employer's FICA liability." The problem is that in the absence of integration between the accounts, "I, as a customer, can't go out and see -- simply, through a single portal -- simultaneously where I am relative to my FSA and my HSA balance," Reynolds adds.
Customers also need to see where they stand with respect to their deductibles and their out-of-pocket maximums so that they know at the point of sale if they have crossed over the line into their area of financial responsibility. "That's a piece of information that requires coordination for the insurance company to be able to push that to the bank and represent it back to the customer," Reynolds says.
In addition to speed, payment processing companies also provide economy of scale, particularly to smaller banks and insurers, according to Celent's Grealish.
While those vendors do work with many of the largest insurers and banks, Grealish suggests that the high degree of customization in major financial institutions' systems will require greater investment to launch attractive HSA offerings. "Your costs would probably start as high as $5 million, depending on how much functionality you have online and how much you offer in the way of value-added services," she says. "That would include things like call center reps conversant with HSAs, people who can provide relevant information to HR departments, whether you want to build an employee training course, etc. -- you get into big money."
JPMC's Josephs declines to talk about actual dollar figures, but acknowledges that it is impossible to pursue the strategy his company has chosen "without significant resources and investment." To enact its strategy, Josephs relates, JPMC has "set up an HSA-specific operations group, we have made significant investment in HSA-specific information technology built on core platforms, and we have invested heavily in integration -- along with our health plan and benefit provider clients -- in order to provide that kind of offering to the marketplace."