BASKING RIDGE, N.J. — Credit unions still sitting on the fence about offering Health Savings Accounts because they think it may be too time consuming an effort should take notes from Affinity Federal Credit Union.
HSAs are tax-free portable savings accounts that can be used to pay for medical expenses including prescription and over-the-counter drugs incurred by individuals, spouses or dependents.
The over $1.4 billion credit union has not only started offering HSAs, but was able to get the program up and running within only 30 days. According to Affinity Member Experience Vice President Donna LoStocco, while the delivery to the market was quick the credit union had spent quite some time reaching a decision.
Recommended For You
"The idea first entered our corporate mind when the law was first enacted but we didn't act on it or seriously consider offering HSAs until 2006," said LoStocco. "The reasons were two-fold–first our former primary sponsor AT&T began offering high deductible health plans and our members wanted to open HSAs but there weren't many institutions offering them, which was a big driving factor for us. And secondly like all financial institutions we wanted to find a new way to increase our deposits in terms of number of accounts and balances."
Upon making the decision, Affinity assembled a research team consisting of members from such departments as operations and compliance.
"We went to the Treasury Web site, which was a great source with lots of great information about HSAs including all the necessary forms and downloadable consumer brochures," said LoStocco. "We also talked to other credit unions especially Patelco Credit Union to find out how they did it and they were so helpful."
LoStocco credits much of the speed to market to Affinity's vendors XP, which already had a HSAs platform saving the credit union from creating one themselves, and BISYS, which provided all the easy to read HSAs forms. Prior to launch, the Affinity team also provided a weeklong informal training for all frontline staffers and created an HSA fact reference guide with details on the program, procedures, frequently asked questions and HSAs in general.
"Because our vendors had these off the shelf solutions we were able to do it all in-house," said LoStocco. "So many people on the team really dedicated themselves to getting this program off the ground and it is a credit to them to accomplish this amazing task in just 30 days."
With an eye of member value and convenience the Affinity HSA program features a 5.13% annual yield and zero fees. Members can pay their medical bills by going to a branch to withdraw funds or via check, online bill pay or starting in April via a special Affinity HSA Visa check card.
"We wanted to offer the best interest rate out there and not charge any fees for this account," said LoStocco. "The response has been so positive. At first we weren't sure if the account was attractive enough but we've had members tell us they were closing their accounts at other institutions to open their HSAs with us."
With a soft online rollout, so far the credit union has about 30 HSAs consisting of members who had initially inquired about the offering. LoStocco says they are a pilot group of sorts before a more formal promotional launch set for early April, which will include statement inserts, in-branch signage and handouts. –[email protected]
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
