Accommodating Consumer Choice
Research conducted by Pittsburgh-based Highmark ($9.1 billion in annual revenue) in 2004 showed that while customers saw HSAs as something distinct from their health plan, they nevertheless wanted them closely connected. To accommodate that preference, the insurer sought a partner that could support broad account management functionality and seamless Web-site navigation between its systems and Highmark's systems.
Highmark chose Wilmington, Del.-based PFPC ($1.9 trillion in assets serviced), a unit of The PNC Financial Services Group. "We knew out of the gate that we wanted to do more than just a simple checking account," says Kim Bellard, VP, e-marketing and customer relationship management, Highmark. "In addition to short-term financing, we wanted to make available longer-range financing where customers can accumulate some money on a nice, tax-preferred basis longer term."
Bellard says that PFPC, which provides Highmark with both custodial and processing services for its HSA, had the administrative capabilities needed to meet the insurer's customers' demands. "PFPC's processing platform is very good at connecting up accounts with a variety of different investment options and administering them," he comments. Highmark's HSA went live Jan. 1, 2005.
In addition to acting as a "gateway to a supermarket of mutual funds," PFPC accommodates its insurer partners' demands by providing its services on a white label basis, according to James Gandolfo, head of HSA development, PFPC. "We will label the presentation of our Internet delivery for enrollment purposes and management of the investment account as if it is the insurer's site," Gandolfo says. "The direct connection between the insurance company and the insured is very important. And so what they are delivering to that insured is both health insurance and the management of the HSA, subcontracted to PFPC."