With rising health care costs and longer life expectancies, plan sponsors are increasingly looking to help employees save for their retirement medical expenses.
Given this trend, retirement plan providers are moving into the health savings account (HSA) market, and the latest to do so is TIAA. The firm says its forthcoming TIAA HSA will be administered by HealthEquity Inc. and will work “in concert” with TIAA retirement plans.
According to the firm, the TIAA HSA will be available in the first quarter to all institutional clients that offer employees a high-deductible health plan (HDHP).
“Health care expenses are increasingly connected to an individual’s ability to retire and maintain a good standard of living throughout their lives,” observes Lori Dickerson Fouché, CEO of TIAA Financial Solutions. She says preparing for rising health care costs is a significant financial concern for both employers and individuals, citing TIAA research showing that more than 90% of plan sponsors say rising health care costs are a significant concern for retirement security.
“As individual life spans increase, so does the potential cost of medical care in retirement,” Fouché adds. “By providing employees a one-stop-shop experience, we believe employees are more likely to take positive steps towards financial security.”
The TIAA HSA will include a diversified series of TIAA-CREF and Nuveen mutual fund investments in an integrated TIAA online and mobile view. In addition, the TIAA HSA will offer participants comprehensive tools and education resources, including a plan comparison tool, an HSA contribution calculator and a future balance calculator.
Ted Bloomberg, chief operating officer of HealthEquity, says his firm will be providing TIAA HSA members with “24/7 education and support.”
TIAA’s announcement comes just a few weeks after T. Rowe Price Retirement Plan Services Inc. announced it will offer integration of ConnectYourCare’s health savings account into its retirement plan offering. ConnectYourCare, a national provider of consumer directed health care solutions, serves as the product administrator and custodian.
That HSA solution will be offered within T. Rowe Price’s retirement savings plan recordkeeping platform, giving eligible participants the ability to view and manage their retirement and health savings accounts holistically.
Last year, HealthSavings Administrators and Orion Advisor Services LLC announced a strategic partnership to empower registered investment advisers to easily integrate HSAs into retirement planning services for their clients.