As more defined contribution sponsors offer health savings accounts and more participants use them for medical care as well as investing, more record keepers want a piece of the action.
Nationwide Mutual Insurance Co. in October, Vanguard Group Inc. in November, Voya Financial Inc. in January and Massachusetts Mutual Life Insurance Co. in April each announced they will offer HSAs to their DC plan clients.
The newcomers — as well as Empower Retirement, which launched its HSA business about 20 months ago — have signed agreements with large HSA providers to administer the programs. Their strategies contrast with Fidelity Investments and Bank of America, record keepers that started offering HSAs in the previous decade and manage HSAs themselves.
"There's a need to engage in broader financial wellness, and HSAs are a natural step," said Hutch Schafer, vice president of business development for retirement plans at Nationwide, Columbus, Ohio., whose HSA was launched May 1.
Remarking that a holistic approach to retirement planning incorporates health care, Mr. Schafer said DC plan participants "need the most efficient solutions to save for paying for health care."
He echoed the comments of other record-keeping executives whose companies have signed up with an HSA administrator rather than build their own program. As Nationwide saw the HSA marketplace grow, executives realized that HSA administration "was not a core competence of ours," Mr. Schafer said. Nationwide's partner is HealthEquity Inc.
Voya Financial Inc. also chose an HSA partner in the name of efficiency. "We wanted to get into the market, and we learned that the best way to do this was through WEX Health Inc.," said Robert Grubka, the Minneapolis-based president of employee benefits for Voya Financial, referring to its HSA administrator. "WEX can handle the scale due to their expertise and skill in the market."
As MassMutual expanded its financial wellness efforts for its DC plan clients, it decided that hiring a partner — WEX Health — was the best strategy, said Tina Wilson, senior vice president and head of investment solutions innovation for MassMutual, Springfield, Mass.
"WEX Health is one of the largest infrastructure providers in the HSAs space," Ms. Wilson said. If her company tried to build from scratch, "it would be inefficient."