On the heels of a similar announcement from Fidelity, TIAA announced on Wednesday that it will offer a Health Savings Account (HSA) to its institutional retirement plan clients to help their participants prepare for health care expenses in retirement.
The TIAA HSA will be administered by HealthEquity, Inc. and will work in concert with TIAA retirement plans.
The TIAA HSA will be available in the first quarter to all institutional clients that offer employees a high-deductible health plan (HDHP).
As TIAA notes, preparing for rising health care costs is a significant financial concern for employers and individuals. TIAA research finds that more than 90 percent of plan sponsors say that rising health care costs are a significant concern for retirement security.
In addition, the majority of Americans (77 percent) TIAA surveyed said they are concerned about retirement health care costs. This concern is supported by a report from the Employee Benefit Research Institute, which found that a 65-year-old couple today needs approximately $301,000 to cover out-of-pocket health care expenses in retirement.
“Health care expenses are increasingly connected to an individual’s ability to retire and maintain a good standard of living throughout their lives,” Lori Dickerson Fouché, CEO of TIAA Financial Solutions, said in a statement. “Offering the TIAA HSA is a part of our deep commitment to finding new and better ways to help our clients address their financial needs to and through retirement.”
The TIAA HSA will include a diversified series of TIAA-CREF and Nuveen mutual fund investments in an integrated TIAA online and mobile view for a simplified client experience.
Education resources
To help employees maximize their savings, the TIAA HSA will offer participants comprehensive tools and education resources including a plan comparison tool, an HSA contribution calculator, and a future balance calculator.
“We’re committed to helping plan sponsors meet the evolving financial needs of their employees,” Timothy Lane, Senior Managing Director of TIAA Health Solutions, added. “The TIAA HSA will enable plan participants to save for health care expenses with a simple, straightforward option that works in concert with their retirement savings plan. A growing number of employers and employees recognize the favorable tax treatment of an HSA as a powerful long-term investment vehicle that can grow over time to fund health expenses in retirement.”