As a marketer of health insurance plans to individuals and small businesses, Milwaukee-based Assurant Health ($2.3 billion in 2005 revenue) already dealt with a market population used to making decisions about its healthcare. That helps to explain why it was first out of the gate with a high-deductible health plan (HDHP) coupled to a health savings account (HSA).
"Early in 2004, we dedicated a group of individuals to look at what functionality we wanted to get into the marketplace within six months, as well as what add-ons we ought to include after that time," says Pete Bacon, vice president, business alliances, Assurant Health. "We sent out RFPs in April and May, and visited banks and organizations that could administer some of the capabilities we identified," Bacon recounts. "We were considering whether to build internally or buy best-in-class for a number of services. One of the things we were interested in was speed."
After engaging with many banks that "didn't know what they wanted to be when they grew up in the HSA space," Bacon says, Assurant found "a very able" custodian partner in United Missouri Bank (a subsidiary of UMB Financial; Kansas City, Mo.; $524 million in revenue). Assurant also established relationships with Amisys Synertech (ASI; Rockville, Md.) and Choicelinx Corp. (Manchester, N.H.) to provide Web-based capabilities for account management and health information access.
The launch of the solution on Oct. 1, 2004, provided Assurant Health HSA owners with what the company describes as an integrated, secure Web site, debit card and checkbook. Soon afterward, Assurant announced the availability of HSA Tools, a suite of "health information, quality data [and] self-diagnosis tools" available online. By April 2005, the carrier had added the ability for account holders to invest in mutual funds, establish recurring automatic deposits from their checking or savings accounts into their HSAs, and access detailed information on prescription drugs.
Plug and Play
As happy as Assurant is with UMB, it has built its system with an open-architecture, plug-and-play capability to easily add other custodian partners, Bacon notes. Many insurers seek a way to extract some value out of their partnership with a bank, which gives banks power to negotiate for an exclusive relationship, he relates. Assurant, by contrast, thinks it fills an important niche in a world with decreasing numbers of individual and small business health insurers and, as such, has a better market opportunity in casting a wide net, Bacon adds.
"We've structured it so that the bank makes its money selling and servicing the account," Bacon says. "We're not looking to dive into their income stream." --A.O.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio