RegisteredRep: Small Business Advisor – Taming Health Insurance Premiums

HSA deposit totals are estimated to reach $8 billion this year and may go as high as $17 billion in 2009. The growth trajectory is comparable to — if not outpacing — that of the IRA, 401(k) or 529 plans in their early years, says Eric Remjeske, president of Devenir, which manages about $100 million in HSA investments, and also offers wealth management services to numerous small-business owners. Mutual fund options currently account for roughly 5 percent of total HSA deposits. However, studies show that HSA contributions are exceeding deductions by a large amount and are expected to more than double in the next two years from $1,500 to $3,500.

As investors continue making deposits and accounts grow, many experts believe educated investors will begin to view HSAs less as a health care product and more as a retirement savings vehicle. With proper planning, these accounts could become real assets for both the business owner and advisor or broker. Even if people deduct some of these funds, billions of dollars of assets will need to be managed.

Escalating health care costs can easily cut into the expense side of any small-business owner’s ledger, and lack of adequate coverage can be a potentially huge liability, says Remjeske. “Health care and HSAs need to be part of the overall investment strategy and ongoing client discussions.”