BofA sees big growth potential in health savings accounts

Bank of America Corp. is seeing record growth in its health savings account business as health care costs continue to rise and employers shift more responsibility onto their workers, the bank said today.

Health savings accounts grew by more than a third in 2011, with 50,000 new accounts from existing corporate clients and new relationships with employers and individuals, the bank said. The products are the fastest-growing of the health benefits the Charlotte bank offers, part of a broader business that provides retirement and benefit plans.

"It comes down to, health care is the No. 1 or 2 financial concern for virtually every customer segment that we have," said Justin Raniszeski, health benefit solutions executive for Bank of America Merrill Lynch.

The bank has been in the business since 2005. Now, it has nearly 200,000 health savings account users with more than $300 million in account balances. The average balance has grown more than 10 percent since 2010 to $2,016, the bank said.

Health savings accounts, designed to work with high-deductible health plans, allow employees to make pretax contributions for medical expenses such as doctors visits and prescriptions. The accounts earn tax-free interest, can be carried over year to year and move with an employee when he changes jobs or retires.

Kevin Crain, the bank's head of institutional retirement and benefit services, said the accounts have become more popular as employers give more accountability to workers for their financial security, from 401(k)s to health benefit plans. Health savings accounts fit naturally with the bank's other services, he said, because corporate clients' financial concerns extend beyond just retirement accounts.

Raniszeski predicts the business will continue to grow.

"The reason we're excited about it is, I don't think we see those things changing," he said.