Are you (or your client) a saver or spender? Budgeter, manager, long-term investor?
HealthSavings Administrators has identified the six major personalities for individuals that invest in health savings accounts and have tailored their service options to each.
The Richmond, Va.-based HSA provider based its findings on more than 5,000 account holders and found variations by demographic, psychographic, and behavioral groups. It then created custom communications to address each persona’s needs.
“It’s a unique approach that improves HSA knowledge and transcends the industry’s ‘one-size-fits-all’ approach to HSAs,” Alison Moore, vice president of marketing at HealthSavings, said in a statement.
The primary HSA personas and associated findings include:
The planner
This is the largest category with 39 percent of accountholders opting in as planners. They are focused on investing their HSA to save for retirement and estate planning as all are very comfortable managing investments.
With the majority of this group in the 45-65 age bracket, most are enrolled in family medical coverage and make more than $100,000 per year. They cite retirement readiness as their biggest financial priority.
The harvester
Fully 25 percent are retired or nearing retirement and now want to get the most out of their HSA. As most are over 65 years old, they are already very or somewhat comfortable managing investments.
They expect their income to stay the same or decrease, and some are managing a chronic illness.
The provider
Approximately 14 percent use their HSA to pay for some doctor’s visits and medical expenses but also consider HSAs a long-term retirement savings vehicle.
Unlike the other personas above, an overwhelming majority of providers is somewhat or very comfortable investing. More than half of providers are also on family medical coverage, which means they have higher HSA contribution limits.
The budgeter
About 9 percent of opted-in accountholders use their HSA strictly to pay for day-to-day medical expenses. They do not feel comfortable managing investments and instead rely on their HSA for short-term spending and/or saving.
The key difference for this group, when compared to the newcomer, is that paying bills is their biggest financial priority and most have children.
The newcomer
Newcomers make up 8 percent of account holders who have opted into a persona. They are new to managing their benefits and want to learn how to get the most out of their HSA.
Based on the research, newcomers tend not to have chronic illnesses, and most did not anticipate medical expenses in 2020.
Newcomers do not feel comfortable or are only somewhat comfortable managing investments, and they rely on their HSA for short-term medical spending and/or saving rather than long-term investments.
The catalyst
Only five percent of account holders chose the catalyst, which is a persona designed to meet the unique needs of women, who are likely to incur 84 percent higher medical costs than men according to the U.S. Department of Health & Human Services.
They want to get the most of their HSA both now and in the future. However, an overwhelming majority are not comfortable or only somewhat comfortable managing investments, and some expect their medical expenses to increase in 2020.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
