Selling Health Savings Accounts to CPAs and Financial Professionals in California: A Guide for Health Insurance Brokers

Health Savings Accounts (HSAs) are valuable for managing healthcare costs, offering tax advantages and long-term savings opportunities. As a health insurance broker in California, you can leverage HSAs to build relationships with qualified* Certified Public Accountants (CPAs) and financial professionals (wealth management, advisors, financial institutions, etc.) who advise their clients on financial matters. Here is a guide on effectively selling HSAs to CPAs and financial professionals in California.

1. Understand the Benefits of HSAs
Just because a CPA or financial professional may have a strong understanding of finances and taxes does not mean they understand the full benefits of HSAs.
Before you approach these clients, ensure you have a comprehensive understanding of HSAs and the benefits they can provide:

*Tax Advantages: Contributions to HSAs are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses. This means money can be earned (income), invested (investment returns), and used to pay expenses without ever being taxed.

*One way to look at the HSA tax advantage:
Example: An HSA subscriber in the 25% tax bracket is enrolled in a $2000 deductible qualified HDHP. Since they pay the deductible with pre-tax dollars, the $2000 deductible would be comparable to a $1500 non-HSA deductible plan. The tax-preferred effect (savings) continues beyond the deductible, all the way up to their out-of-pocket maximum. An $8,000 OOP max would behave like a $6,000 OOP max in a non-HSA plan.

*Cost Savings: HSAs are paired with qualified high-deductible health plans (HDHPs), which typically have lower premiums than comparable non-HSA plans.

*Tax-free Investment Returns: HSA funds can be invested, growing into a retirement nest egg similar to a 401K or IRA, except there are no Required Minimum Distributions, and you do not pay tax on the investment earnings when you use the money for qualified health care expenses.

*Flexibility and Ownership: The employee owns HSA funds and stays with them throughout their career (from job to job) and into retirement. There are no use-it-or-lose-it provisions like FSA’s.

Attract and Retain: HSAs have become a valuable tool in today’s tight labor market for employers to attract and retain talent. With no discrimination tests like 401K plans, employers easily add a valuable employee benefit to their benefits package.

Important Note: The tax effects mentioned above are federal taxes. California is one of only two states that do not recognize HSAs. Given this, the benefit from the federal tax effect is typically good enough to make the HSA math work for most companies and employees.

2. Identify Key CPA /Financial Professional Contacts
Target CPAs and Financial Professional firms. You have proven methods to lower the cost of health insurance for employers and the cost of health care for their employees and provide a valuable employee benefit. Their financial acumen should make HSA math more straightforward to understand. Often, the firm benefits administrator may be someone other than a financial professional, and you can assist them with explaining HSAs to their management, who would be interested in the financial benefits offered through HSA plans.

3. Develop a Value Proposition for these prospects
CPAs and financial professionals are trusted advisors who prioritize their clients’ financial well-being. Tailor your value proposition to highlight how HSAs can benefit their employees while controlling/reducing employer costs. You are providing a service similar to what they provide to their customers.

*Tax Savings: Emphasize the tax benefits HSAs provide, which can be a significant selling point for tax-focused CPAs and financial professionals.

*Client Satisfaction: HSAs can improve client satisfaction by having a successful, cost-effective enhancement to the employee benefits offering.

*Added Value: Talk their talk by exhibiting a deep understanding of HSAs to CPAs and financial professionals, differentiating yourself from the competition.

4. Educate and Empower
Provide your prospective clients with the knowledge and tools they need to implement HSAs to their management and employees confidently:

*Workshops and Webinars: Host informational sessions to educate your clients on the benefits of HSAs, how they work, and how to integrate them into their employee benefits offerings.

*Resource Materials: Create easy-to-understand brochures, whitepapers, and case studies that you can provide prospects and clients. There is an abundance of examples and templates available on the web and from HSA providers/administrators.

*Personal Consultations: Offer one-on-one consultations to address specific questions and concerns they may have.

Show your prospects/clients this graph below – they will want to join this growing HSA trend!

Source: https://www.devenir.com/research/2023-year-end-devenir-hsa-research-report/

5. Leverage Professional Networks
Use your professional networks to connect with CPAs and financial professionals and build relationships:

*Join CPA Associations: Become a member of local and state CPA associations, such as the California Society of Certified Public Accountants (CalCPA). Insurance brokers qualify for Financial Professional and Associate membership classes.

*Attend Industry Events: Participate in CPA and banking/ wealth management conferences, seminars, and networking events to meet potential clients.

6. Highlight Compliance and Regulatory Knowledge
California has specific regulations and compliance requirements related to health insurance and HSAs. Demonstrate your expertise in these areas to build trust:

*Stay Informed: Keep current with California state laws and federal regulations affecting HSAs. For example, California requires embedded deductibles for qualified HDHPs. Know what this means and how it works. Simple examples usually do the trick.

*Provide Updates: Regularly update your clients on any changes in legislation that may impact HSAs – and the effect it may have on their clients.

*Offer Compliance Support: Help ensure they comply with all relevant regulations.

By positioning yourself as a knowledgeable and dependable partner, you can successfully sell HSAs to CPAs and financial professionals in California. You can help them provide valuable financial solutions to their clients while growing your own business.