Date: Wed, 7 Jan 2004 12:39:18 CST
From: "HW \"Skip\" Weldon" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Health Savings Accounts
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On Wed, 7 Jan 2004 11:39:44 CST, "Caroline"
 wrote:

>> Until the marketplace evolves to where major employers are adopting
>> jumbo group health insurance deductibles, there will be no incentive
>> for Vanguard et. al. to go to the expense of creating new products.
>
>Isn't there an incentive to create these simply to get the fees associated with,
>for example, any mutual funds which the HSA would hold?
>
>I don't recall the new law mentioning significant restrictions on or barriers to
>where these accounts might be opened.

In order to participate in an HSA, an individual must be covered under
a "high deductible health plan", defined as a plan with a minimum
annual deductible of $1000.  My point (above) was that until we saw
more high deductible plans, there wouldn't be enough demand to justify
the start-up costs.  

Key in this is that setting up an HSA goes beyond merely furnishing
investment facilities - someone is going to have to ramp up to pay
claims, and perform related insurance tasks.  Basically I see HSA as
another variation of a self-funded plan.

After that your point is well made - once the demand is there, some
capitalist - god love 'em - will find a way to make a buck.  My guess
is that if it happens, the lead will come from the health insurance
side, not the investment side.  But since a lot of the regs are still
in process, we can't say much for now.

-HW "Skip" Weldon
 Columbia, SC