Corporation's Human Resources & Investor Solutions (HR&IS) business today announced that it has developed a fully integrated Health Savings Account (HSA) solution that will be offered both through alliance relationships with insurance companies and health care plan providers, and to its corporate customers nationwide.
HSAs, established as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, allow employers and employees to contribute non-taxable funds (up to $2,600 for an individual and $5,150 for a family in 2004) to pay for qualified medical expenses under high deductible health care coverage. Unused funds can be invested and rolled over from year to year, with the balance used to pay for qualified medical expenses throughout an employee's career or even during retirement.
"Mellon has a unique competitive advantage by offering a complete, comprehensive HSA solution," said James D. Aramanda, Mellon vice chairman and head of its HR&IS business. "Our HSA package is well suited to address the needs of both companies and their employees. We can administer the entire plan for employer and employee alike, from establishing and maintaining the custodial and investment accounts to processing deposits and payments to providing total customer service support."
Included in Mellon's HSA solution is an interest-bearing checking account, coupled with an investment account. Both personalized checks and a MasterCard debit card are provided to facilitate payment for qualified medical expenses. Mellon's patent-pending HSA solution also integrates payment processing directly with health care plans, providing a seamless, paperless, user-friendly customer experience.
"HSAs represent a powerful new approach for addressing spiraling health care costs. Both employers and consumers are eager for additional information on this product," Aramanda added. "Consumers are most interested in the many tax advantages, especially since contributions to and earnings on HSA balances are not taxed, and the use of account funds is tax-free for qualified medical expenses."
Mellon brings measurable experience to the HSA marketplace, based on its position as a major provider of medical savings accounts (MSAs), the precursor to HSAs first made available to small companies in 1997. With more than 40 insurance company and affinity group marketing partners, Mellon offered MSA subscribers a sophisticated dual bank account/investment account product. "Based on our MSA knowledge, we have designed an HSA solution that provides maximum flexibility, easy payment solutions and competitive investment options," Aramanda said. He added that Mellon is in discussions with numerous health care plans regarding the distribution of Mellon's integrated HSA solution to their members.
