UMB Financial Corp. has added a leg to its distribution structure for health savings accounts.

The company's UMB Healthcare Services division had, until recently, mostly worked with health plans, software providers and third-party administrators to distribute its health savings account and other consumer-directed health-care products. About 30 days ago, the Kansas City, Mo., banking company opened a window to insurance brokerages and agencies nationwide.

It has positioned sales executives in New York, Florida, Texas, Washington state and the Midwest and intends to broaden that geographic footprint early next year, according to Dennis Triplett, the health-care services division's chief executive officer.

The initiative is an effort to "broaden and even improve growth rates we've had," he said.

UMB is already one of the largest sellers of HSAs in the country. At the end of August it had 143,000 accounts under custody, and the deposits in its them totaled $236 million. These deposits were up from $100 million at the end of 2007.

The time is right to expand into the broker-sold market, said Kunal Pandya, a senior analyst for health insurance and payments at the Aite Group LLC research firm.

"It's a good move, especially with the whole health-care reform happening," he said. "It's a very important distribution channel."

More than 30 million Americans are expected to join the ranks of the insured as a result of the health-care reform law, Pandya said. Many people and employers will be inclined to choose a plan based on affordability, which is where high-deductible health insurance has an edge, he said. High-deductible plans can be used in conjunction with health savings accounts.

Until recently, brokers had not shown much interest in learning about and selling high-deductible health plans compared to traditional plans such as HMOs and PPOs, which pay higher commissions. This seems likely to change as brokers bow to market demand, said Pandya.

"If you're going to be a broker in the market, you have to evolve with the market," he said.

Meanwhile, evidence accumulates that the large-plan market has embraced health savings accounts. In a recent survey by the National Business Group on Health, a trade group representing large employers, 61% of respondents indicated they would offer a consumer-directed health plan in 2011.

One-fifth of employers that offer consumer-directed health plans indicated they have moved to a full replacement plan, or will do so, 10% more than in 2010.

High-deductible health plans in conjunction with HSAs are the most common kind of consumer-directed health coverage that the big employers use, according to the business health group's survey. Sixty-four percent of respondents who have consumer-directed plans said they use HSAs.

As part of its outreach to benefits brokers, UMB's health-care services division has added four regional sales representatives and a national sales director.

The sales director, Kevin Robertson, joined UMB from rival HSA Bank in Sheboygan, Wis., a unit of Webster Financial Corp. in Waterbury, Conn. At HSA Bank, he was vice president of national sales.

Robertson is assigned to lead UMB into new markets for its HSAs, flexible spending accounts and health reimbursement arrangements.

Meanwhile, demand for HSAs appears to be steadily picking up, now that some of the uncertainty related to health-care reform has disappeared, said Triplett. UMB expects growth of more than 25% this year and next, he said.

"Part of what we are seeing about health-care reform is that there is an increase in the adoption of consumer-directed health-care accounts and HSAs," he said.

Employers are making decisions about health plan design despite the fact that the health-care law still needs to tale final shape with the creation of rules and regulations to enforce it, he said.

UMB added a significant amount of business from school districts last summer. Other sorts of employers are likely to sign deals around yearend, Triplett said.

In addition to custody-related services, UMB supplies multipurpose card technology to the health-care industry in conjunction with the giant processor First Data Corp. It earns interchange fees when those cards are used in HSA, FSA or HRA transactions.

The banks that offer such cards dodged a bullet this summer when their interchange fees were exempted from restrictions within the financial reform legislation.

As a result, the so-called Durbin amendment, which regulates interchange fees, does not apply to the cards. Triplett called the exemption a "silver lining" in the legislation.

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