Jack Henry Taps HealthEquity for Administration of Medical Accounts
September 11, 2007 Alex Woodie
Jack Henry & Associates has struck a deal with HealthEquity, a provider of health savings account (HSA) solutions, to provide outsourced HSA administration services to banks and credit unions that rely on Jack Henry’s software, the software company announced last week.
Jack Henry has been successfully developing software for community banks since it was founded more than 30 years ago. Over the years, the company has expanded through organic growth and acquisition, and today the $668 million company offers a wide range of software and services to about 8,700 customers through three divisions, including Jack Henry Banking, Symitar, and ProfitStars.
The pros and cons of partnering for the HSA functionality–a projected high-growth area–instead of developing it in-house were weighed back and forth, according to Debbie Wood, general manager of marketing and strategic initiatives for Jack Henry.
“We respect the expertise and infrastructure it takes to administer these qualified accounts, and we determined it was in the best interest of our clients and our company to partner with an established company that offers a proven solution,” she says.
HealthEquity, which is based in American Fork, Utah, sells software and services that help organizations manage health care accounts, such as an HSA. Also known as a “medical 401(k),” an HSA is a tax-advantaged spending and savings account that provides higher deductibles and lower premiums than traditional health insurance. With an HSA, participants contribute up to about $3,000 per year into their accounts, which can be invested in any bonds or securities, roll-over from year to year, and can be withdrawn penalty free after retirement. As medical expenses occur, the participants pay them out of the HSA account, which is managed by a bank or credit union. When the deductible is met, the person’s insurance kicks in to pay the rest.
As part of the deal with Jack Henry, HealthEquity will offer outsourced access to HSA administration functions to Jack Henry customers, including deposit and withdrawal alternatives, multiple investment options, 24-hour customer service, and a Web portal for account holders.
“Our HSA solution will provide an easy-to-use and cost-effective means for these banks and credit unions to offer HSAs to their employees and their consumer customers,” says Steve Neeleman, CEO of HealthEquity.