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Boston Children's Hospital Narrator
Pinpointing the genetic changes that predispose us to disease, identifying the roots of mental illness, treating congenital anomalies even before birth. At Boston Children's Hospital, we're investing in children's health today to ensure the well being of adults tomorrow. As home to the world's largest pediatric research enterprise and more than 260 specialty programs, Boston Children's is where the world comes for answers.
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Carol Massar
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Carol Massar
You're listening to Bloomberg businessweek with Carol Massar and Tim Stanvak on Bloomberg Radio.
Bloomberg Host
We want to talk a little bit about, as we mentioned, some more voices from the C suite. So let's get to it. Health Equity shares of that company rallying for a second day as analysts raised price targets on the stock following earnings late Tuesday. The company administers health saving accounts and flexible spending accounts. And and it did boost its adjusted profit forecast for the full year. It also reported revenue and adjusted earnings per share for the fiscal second quarter that beat the average analyst estimate. So here to talk about the quarter, the outlook in the business is the company's president CEO. He's Scott Cutler. And the company, if you're not familiar, $8.4 billion market cap. Scott joining us right here in studio and full disclosure, we have health equity cards. FSA is here in Bloomberg. Full disclosure, I gotta tell you, we all take these things for granted. We use them and so on and so forth. Lay out your business though. How do you guys make money on all of this?
Scott Cutler
So we cover about a quarter of working Americans today would have an account with us. And I think the little known fact about Health Savings Account is that they are the Most tax advantaged savings vehicle.
Bloomberg Host
That you could have is that different from an fsa?
Scott Cutler
It is different than an FSA because an FSA is use it or lose it. An HSA is an asset that you should be saving in you, you should be contributing at the max for a family is about $8,500 a year. And then you should be helping that invest and grow over time because you can have it grow tax free and then ultimately you can spend it tax free as well for health care related expenditures. So it's a, it's a, it's a great account to have, but it's also great to be able to connect it to your health care, your wellness. And it's obviously a benefit that's provided.
Carol Massar
By employers, but it's not provided by every employer. I got. I've been hearing about health savings account, my entire care. I've never had one. I've never had the opportunity to have one. Is it because I've never had a high deductible health plan?
Scott Cutler
It's, it's always associated with a, with a plan. And I'll maybe talk a little bit about how it's expanding now under the, under the new legislation, but it's first initially tied to a high deductible health plan. And the challenge is only about a third of people, when offered the choice, will select a high deductible health plan. The reality is a high deductible health plan, in terms of out overall out of pocket costs is typically no more expensive than a low deductible plan, particularly when you combine it with an hsa. And so you've got to select that.
Bloomberg Host
Plan is the tax benefit, you're saying?
Scott Cutler
Yeah, that's how it was set up. And so you've got to select that plan and then you can have an HSA that's associated with it. And so we look at adoption of high deductible health plans as one step. And then once you have one, you know you should be contributing and then.
Carol Massar
Using that, does it put the onus on the employee to, to make these financial decisions rather than the company in that sense, like you have to actually go out. If you, if you are offered a range of health plans where you work, which oftentimes people are doing, you don't necessarily have the information always to go and make that choice.
Scott Cutler
It's, it's two things. One, as an employer, the challenge that you have is how do you manage your health care costs that are growing at three times that of wages? Yeah. And one of Those things is planned construction. So plan construction around how many of your employees do you want and can you encourage to be in a high deductible health plan? Our best in class employers actually only offer a health, high deductible health plan. That's what we do as well. But we also match and we contribute and we tie that to great wellness behaviors. And so from an enterprise, this is a great way to control your healthcare costs for an individual. This is to help you prepare for the healthcare costs that will come to you and in retirement or, you know, or in any health event and you're preparing for that future. So it works both sides.
Bloomberg Host
The Trump administration, first term as well as second term, has certainly expanded HSA eligibility for some plans and for telehealth Services. Talked about those changes and what it's meant in terms of the activity you are seeing in the growth.
Scott Cutler
We have a whole new class of Americans now following the passage of the bill that now qualify to be able to and are eligible for an hsa. So if you have and signed up part of a ACA Marketplace plan, a bronze plan, you can now enroll in an HSA where before you were not eligible. And so that's true with the new legislation. So we're bringing in the largest expansion of the HSA eligibility in the last 20 years. So we think it's a big opportunity, but it's also an opportunity to educate individuals about why should I have an HSA and what can be used for.
Carol Massar
You know, you guys have a really interesting view of the economy because you see directly how many employees are being added to plans. We're getting some light data when it comes to employment in the US we'll get a payrolls report tomorrow that might clear things up. ADP came in a little light today. What can you tell us about what you're seeing from customers right now in terms of labor?
Scott Cutler
So when you, when you think about us, yes, we would see, you know, job churn, both hiring as well as people moving as a tailwind for, for our business early in the year we saw it, we said this market feels a little weaker. We were communicating that out to the street early in the year. And then obviously with the BLS revising down the labor statistics over the last couple of quarters, that's been very true. We still see that. And so it's a weaker job market overall, but also I think from employers, it's sort of this other thing which is also health care costs overall are unaffordable for many people and even companies. And so how is it that you deal with, with both and so we have visibility I guess into both of those trends.
Bloomberg Host
Who's the typical person who opens up hsa? I'm just curious, is there a specific demographic or.
Scott Cutler
No.
Boston Children's Hospital Narrator
All over the place.
Scott Cutler
No, it's as broad as the US workforce would be. Old, young, old. Yeah. And actually what excited me about joining health equity was, was seeing my son and who entered the workforce, had his firm provided an hsa. How he was using it in a digital app. Think of it as stored value. Using it in, in health care related expenditures, an integrated part of his health decisions. He and his wife and I was like this is a very cool company, great app. And was one of the reasons I joined.
Carol Massar
You know, it's interesting. I, as Carol mentioned, we use full disclosure. We use health equity here. And also it's not like we have a choice. I mean this is what we are offered as employees. And I think that's the case for all employers who use employees who use services such as yours. They, they are given this is the option when they sign up or when you start working somewhere. But I use it less for, for health stuff. I use it more for non health stuff like transportation benefits, dependent care, reimbursement, lifestyle stuff that we get. Reimbursement in that sense, is that a tiny part of your business compared to the health care side?
Scott Cutler
So we have, we have HSAs and then we have other reimbursement accounts as well as commuter and cobra. So your commuter benefits would be through a different of account. COBRA would be for, you know, unemployment and then you have FSA's lifestyle savings accounts. So all sorts of different accounts. Most of our businesses and HSAs. But as we go to employers, you know, Bloomberg being one, there's a host of products that employers like to offer as part of their benefit plan. And so we offer the host of those CDB products overall.
Bloomberg Host
So Scott, when you look at kind of the macro stuff that's going on and coming at us nonstop today, a lot of it coming out of D.C. i mean what's, what's top of mind? Is it just regulatory in terms of changes coming out of Washington that is most important for your world or is it also kind of where the economy is?
Scott Cutler
Well, in the health care space this year we have a very active year on the legislative front. Things changing that the one big beautiful bill was one of the fastest pieces of legislation that moved through both, you know and I think as you look at other things, expiring tax credits at the, at the end of the year in health care are pretty significant. There's, you know, potentially big changes that could come if those tax credits do expire. And so, you know, Washington, D.C. the regulatory front creates a lot of uncertainty around what's going to happen around legislative change. And then overall, some of the impact on policies, you know, for a CEO makes you take a step back and say, hey, where do I want to take risk? Where do I see that risk? What can I control and manage? And, you know, I think we see that. I see that as a leader as well.
Carol Massar
What do you actively push for in Washington? If you do have lobbyists, what do you want?
Scott Cutler
Yeah, I mean, we're actively lobbying in Washington. Our agenda has really been how do you address the affordability crisis of health care and how do you prepare more Americans for that health care expense? We do believe that access to an HSA is one way we want to better connect people to saving and spending to their healthcare. We want employers to think about their role in that. And you know, I think if we're all involved in that aspect and we're connected to the health care decisions, we can drive costs overall of health care in the system down. And it's 20% of US GDP and those and those costs are rising faster. And so I think we all have.
Bloomberg Host
An active role to play and not always with great outcomes, certainly here in the United States, despite all that spending. Scott, thank you so much. Really appreciate it.
Boston Children's Hospital Narrator
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Date: September 9, 2025
Hosts: Carol Massar, Tim Stenovec
Guest: Scott Cutler, President & CEO of HealthEquity
This episode of Bloomberg Businessweek explores the rising costs of health care in the United States and the role of Health Savings Accounts (HSAs) in addressing both employee and employer needs. Scott Cutler, CEO of HealthEquity, joins the hosts to discuss recent company performance, the growing importance of HSAs, impacts of legislative changes, and broader trends underlying health care affordability.
Market Presence:
How the Company Makes Money:
HSAs:
FSAs:
Employer Side:
Employee Side:
Demographics:
Other Benefits:
Legislation’s Fast Pace and Uncertainty:
Lobbying & Policy Advocacy:
“A little known fact about Health Savings Accounts is that they are the most tax advantaged savings vehicle.”
— Scott Cutler ([02:30])
“It's always associated with a [high deductible] plan… only about a third of people, when offered the choice, will select a high deductible health plan. But in reality, [out-of-pocket costs] are typically no more expensive…particularly when you combine it with an HSA.”
— Scott Cutler ([03:29])
“We have a whole new class of Americans now qualified to be able to… enroll in an HSA. We’re bringing in the largest expansion of HSA eligibility in the last 20 years.”
— Scott Cutler ([05:34])
“Healthcare costs are growing at three times that of wages.”
— Scott Cutler ([04:34])
“Health care is unaffordable for many people and companies. We have visibility into both of those trends.”
— Scott Cutler ([06:30])
“The regulatory front creates a lot of uncertainty around what’s going to happen… as a leader, you have to decide where you want to take risk, what you can control and manage.”
— Scott Cutler ([09:10])
“Our agenda has really been: how do you address the affordability crisis of health care and how do you prepare more Americans for that health care expense?”
— Scott Cutler ([10:04])
This episode dives into the complexities of health care costs, policy changes, and the importance of HSAs as both a savings vehicle and a tool for financial health. Scott Cutler highlights how both individuals and corporations are grappling with rising expenses, expanding eligibility, and the growing need for education around healthcare planning. HealthEquity’s position at the center of these trends offers a unique insight into the American healthcare economy’s evolving landscape.