As a river bed widens, the current slows but the underlying power of the water’s surge does not diminish.

As Information Strategies, Inc.’s quarterly survey indicates, the growth in custodial accounts is not slowing but the number of custodians available to pick up the flow is growing substantially.

In its latest survey, ISI found substantial growth in deposits, particularly industry leaders such as HSA Bank reporting 7,000 new accounts in this quarter raising its total accounts to 157,814.

Other custodians report similar increases.  It is the new custodians reporting for the first time that indicate growth in HSAs has not slowed but rather deepened.
These newer custodians will be reported in depth early in August.

Based on its collecting of data from more than 120 custodians and reflecting some changes in HSA purchaser patterns first reported in May, ISI is predicting that when final numbers are collected and collated 1.7 million total accounts will have put away $2.4 Billion in deposits.

The river surge of new accounts will increase as the year goes by and it is very likely that the total enrollment of 3.6 million accounts will be reached.

Among some of the highlights found so far from the survey:

1. Discovery Benefits gets 100% of its individual/family HSAs from the Internet and 100% of company/employer HSAs from consultants.
2. Adelbert Spann of First American Bank said he sees a peak in HSA activity and enrollment in the middle of the year as well as at tax time and the beginning of the year.  Most other banks report an increase in activity during tax time and the beginning of the year.  All are reporting a steady stream of accounts that they believe will really grow in third and fourth quarter.
3. Two banks, American Bank and Thrivent, report that the majority of their HSAs are from individuals/families instead of companies.  For American Bank, who has been offering HSAs for only one year, 90% of their accounts are individuals/families. 
4. A preliminary analysis of this quarter’s survey indicates that much of the activity is coming from individuals and that what ever business requests are coming up are ripples of the RFQs that will appear this fall.

While still strong, HSAs are taking on the role of a flood advancing before a storm.  The surge is very much there but not as strong as it will be.