ST. LOUIS -- A change in how its membership's core employer provides health care benefits prompted Gateway Metro Credit Union to turn to its core processor for help in offering the new health savings accounts.
Now a community charter, Gateway Metro's list of 25,000 members is still heavily stocked with employees and retirees of the former Southwest Bell Corp. (now AT&T) and the 10-branch credit union has a main branch in one of the Baby Bell's major St. Louis office buildings.
When the telecommunications company changed its health plan, SBC retirees on the Gateway Metro board began asking for the HSA option, a new federal plan that allows participants to put pre-tax money aside for medical expenses. "With the cost of health care going up for everyone, we were looking at doing it internally, too, but at the time no one was supporting the accounts, so we turned to our core processor to see what was available," says Tammy Hampton, the $177 million credit union's chief member services officer.
Gateway Metro CU is a service bureau client of IntegraSys and on the back end, "basically what we've done with our systems is create the ability to accept deposits and withdrawals out of a savings-type account that we can flag as an HSA account," says Dan Urscheler, the IntegraSys offerings development manager working with HSAs.
Key to that process was automating compliance with IRS regulations for the HSAs while also ensuring that funds were credited to the proper accounts. At first it took phone calls to clarify whether a BIN number was for a health savings or regular checking account, but that process has since been automated, Hampton says.
At the front end, two key elements of the system are the HSA Maintenance screen and the Transfer File Information screen. The first enables credit unions to correctly code HSA transactions and provides a summary of all HSA contribution and distribution activity. The second allows credit unions to set up automated transfers to a member's HSA share or share draft account.
"It's really much like an IRA account with its specialized reporting and compliance requirements," says Sara Brooks, IntegraSys senior vice president of strategy and offerings development. The service was rolled out in January and Hampton and her credit union were ready to make the leap as early adopters.
Brooks says her Fiserv unit was "fortunate to have a couple key clients such as Gateway who recognized the potential of the HSA market and jumped into that space. It was probably a little painful in the beginning, before we had the functionality released into the core, but the fact that they started doing the accounts at the same time as we were developing the functionality allowed us to leverage what they were learning and putting that into the system."
That leveraging meant an early end to the manual inputting of data that Hampton handled, as the HSA program got under way at Gateway Metro. "For the first year, I did all the tracking by hand. We had about 10 accounts and I'd use the forms supplied to us by CUNA Mutual, which already was doing our IRA processing," she says.
"Then we started working with IntegraSys to bring everything up to speed, to work like it did with our IRAs, with distribution buckets and contribution buckets and reports that we could supply to CUNA Mutual," Hampton says. "We're fortunate to now be able to do that, since we expect this to grow."
The credit union currently is administering about 150 health-savings accounts, comprising about $95,000 in total contributions. The cost is $25 per year for members without checking and direct deposit, free for those who do.
Gateway Metro has been told that it currently has the most members using the accounts out of the 185 credit unions using CUNA Mutual's services for HSAs, Hampton says.
"In addition to what they already do for us, hopefully by the end of the year, working with IntegraSys and CUNA, we'll be able to soon do electronic transmission of the IRS forms like the 5498 and 1099," says the Gateway member services chief.
"We're looking for that by the end of the year." Hampton says she expects the number of members using HSA accounts to grow, especially now that debit cards have been added. At first, members could only use checks to draw on the accounts.
IntegraSys also is expecting to see the demand grow. "Several credit unions already are live across our various core platforms, but from an adoption standpoint, the number of credit unions jumping into this space is small compared with our total client base," Brooks says. (The Fiserv unit provides core processing to approximately 900 credit unions.)
"But in conversations with clients in regard to their plans over the next 18 to 24 months, they're all telling us they're evaluating HSAs and deciding whether it's a market they want to jump into," the IntegraSys executive says. "So we believe adoption is going to escalate in 2007." --firstname.lastname@example.org