Good morning, everyone. Welcome to the JP Morgan Healthcare Conference. My name is Anne Samuel, and I'm the healthcare technology and distribution analyst here at JP Morgan. We're really excited to have HealthEquity presenting. This morning we've got CEO Jon Kessler, and founder, Dr. Steve Neeleman, which is a nice treat. We'll have Jon do the presentation, and then afterwards, we'll take Q&A from the audience. If you have a question, please raise your hand. There'll be a microphone circulating the room. With that, let me turn it over to Jon.
Thank you. Thanks, Anne Samuel. I'm gonna try and be pithy. Yeah, pithy. I think pithy is good. I'm not sure. But brief, so that we have plenty of time for Q&A. Get revved up for the Q&A. I think, this is I wanna say first thank you to JPMorgan, genuinely. Someone pointed out to me yesterday that this is, our tenth year here, and it's pretty cool. As I go through this, there'll be a few callbacks. The good news about having been here 10 years and having had the same strategy for a very long time is, we don't really typically have to introduce ourselves. You all know who we are.
We're the market leader in Health Savings Accounts and in other associated consumer-directed benefits, and these are some of the data that show that. Next slide, please. Over that period of time, what we've done is we've outperformed our market, and we continue to have the opportunity to outperform a market that is good, strong, proven itself quite stable through recessionary environments and has done well in good environments. Our view is that from a revenue perspective, the market that we sit in is a core market and HSA is gonna grow around 10% in, from a revenue perspective. Our, our view is that within that segment, we can continue to outperform it.
What the news that we have this week is that we have given an initial look at our fiscal 2023 sales results. As many of you know, we are January 31st fiscal year, so that we can confuse you as well as us. We're giving you a look into the results of the year that for us is just now ending. These numbers are those results. Rather than walk through them, I'll say simply that the summary is if you look at our HSA business, the key numbers are all up in the 10%+ range.
This year has been in the absence of the interfering effects of material acquisitions and the like, so, you know, really good, strong, solid organic growth and what obviously has been a good year for us. That looks even better when you look at new HSA openings. This is kind of our key metric for the future. As you can see, these numbers have gone up over the last few years. Of course, we have benefited from the job creation that has occurred in the last two years, and I wouldn't wanna fool anyone in that regard.
Fundamentally, I think what we benefited from is a strategy that we began implementing now more than five years ago, I don't know, it's been a while, around being able to reach more employers and then ultimately more members where they are through our distribution partners. The rest of the sort of highlight of this presentation is. Highlight is maybe too strong. The core of this is why did we do that? Why have we outperformed over the course of a number of years? Why does it appear as though looking at this year that's now ending, we will have again, you know, as we've done for the last decade, gained market share? This is my first callback to 10 years ago.
We had the benefit of some JP Morgan investment bankers who if they're not in this room now 'cause they've all gone off to private equity and been replaced by the next generation. Right? Funny, but true. But we had their benefit in designing a wonderful presentation that explained how we would outgrow the market. Really, in addition to our purple service that we're very proud of and that we deliver, there were two other core components. The first of those was what we felt was a really differentiated approach to distribution. We called it B2B2C. We've neglected to have the lawyers copyright that. That was unfortunate, but that would have been a major source of revenue had we done so.
You know, we looked at it then as kind of a pyramid, right, where we have partners. Partners are strong. We really work hard at our relationships with our partners at our technical integration, our business integration, and so forth. That helps us reach employers, right, which who in turn help us engage deeply with our individual members, of whom today we have almost 15 million. We talked about it like a little bit of a pyramid, right? What's actually happened is exactly what we said, except that today we understand it to be more of a virtuous cycle, the virtue being that we get strong retention and strong growth within our existing business.
we're gonna talk about each of the components a little bit, our partners, our employers, and then our engagement with our members, hopefully you'll enjoy that. Starting with partners. Last year, meaning what for us was fiscal 2022, right? We had a really strong year in terms of both adding new partners and then bringing new product on shelf with existing partners. That was a major contributor to our sales success this year. One of the things that we did last year, for example, is we acquired a business called Further from Blue Cross and Blue Shield of Minnesota.
A key asset of that business was relationships with eight additional Blue Cross Blue Shield plans spanning the country, which really kinda cemented our leadership within that space, and I think gave the Blue system as a whole confidence that we were kinda here to stay. There's also things we passed up on that would've, I think undermined that confidence. In any event, the result of our strength with our partnership, if you really look at our sales, 75% of our sales were with our partners this year of our new logo sales. I'm sorry. If you look at the win rates, right? It's not surprising our win rates are 50% higher when we are selling with our partners.
So we're very focused on this strategy. It is how we do business. It's not that we don't go into the field. We are not a, you know, we sell software and sit in the back row with our computers, and I don't wanna type on this computer 'cause I don't know what'll happen. You know, that's not what we do. We're in the field, but we are in the field with our partners, in most of the major transactions and many small employer transactions that we do. So that helps us reach our clients and gives us the opportunity to engage deeply with our clients. I think a second contributor this year was the depth of engagement we had with our clients.
Here is an example of that I have to say, I'm hoping you'll ask questions about that Steve can answer because was intimately involved with this. Pfizer, you know, people talk about the HSA market, and they're like, "What inning are we in?" Et cetera, et cetera. We'll say, "We're in, like, the fifth inning." People will say, "Doesn't everyone have HSAs?" Well, they don't. Pfizer, as an example, has never had an HSA before this year, right? Well, why not? The answer turns out to be that Pfizer was concerned about two things. One was the equity implications, right? The second was they're a pharmaceutical company. They're not, like, so keen on high deductibles. Yeah? That's supposed to be a laugh line. It's fun. It's a little fun.
I mean, it's what passes for funny from me. We worked really deeply with Pfizer to design a product that had a really strong equity component, meaning a really strong component of having to balance. If you wanna ask, Steve will tell you how we did that. Then worked really hard on the communications and the inclusiveness of the communications, right? The result of that was, in its first year, this thing really blew it away, right? One in three Pfizer colleagues. I think I call them colleagues. Colleagues? Yeah. One in three Pfizer colleagues enrolled in this product this year as a health plan. It's like. If you look at in their world, they take inclusiveness very seriously. They divide things by income.
They look at gender and so forth. An interesting fact is that enrollment was very consistent across the income groups, 37%. That one in three number translated to 37%, even within their lowest income tier. Pretty cool. Deep integration with our clients and deep engagement with our clients translates to deeper adoption and engagement with our existing clients and ultimately with their members. There are sort of two flavors of this. We've talked about, this is what we call MaxEnroll, and we've talked about a little bit over the course of the year. Flavor 1 is, let's call it the bespoke version, where we're working with individual clients, tailoring messages to their situations, et cetera.
We had this year and again, as a major contributor over 4x the adoption of our bespoke MaxEnroll product that we had last year. The second component, and one that I think is even more interesting going forward, is that this is the first year we started to give a shot at how do we kind of productize this thing and roll it out to our, you know, we have 120 odd thousand clients. How do we roll it out more broadly? We rolled out more of a purely digital version of this thing. I was shocked at the level of uptake over the course of November and December.
For those who heard us in December and heard us speak confidently about our HSA enrollments, that was the thing that made me feel confident that, you know, clients in a period where they don't have a ton of wins to deliver. We're, you know, we're all looking at recession and so forth, really amped up what they were doing on education, and we were able to deliver that in a scalable way. Again, a major contributor during open enrollment to our performance in Q4 in particular. Lastly here, we've been able to continue to engage with our members on an ongoing basis to deliver value. You know, this has been a tough year for HSA balances. Industry-wide reporting balance declines for the first year ever, right? Average balance declines. Well, why?
In the context of inflation, you get lower savings rates, you get lower balances. We were actually able to grow our balances based on our last quarterly reporting over the course of this year. We're really proud of that, to be able to do that within a highly inflationary environment, to keep people focused on saving and saving for the long term. That's notwithstanding the fact that a third of our invested HSA assets are invested, and you all know what the markets did this year. That's why we were successful this last year. I now wanna talk about a little bit about going forward. The second advantage that we talked about 10 years ago, the first was our unique approach to distribution and kind of cascading engagement, right?
The second was technology that supported a very diverse ecosystem. Consultants or bankers, you gotta say ecosystem. We did say that. There was like logos on this slide and all kind of cool stuff. It's been effective. It's been very effective. It's made us a good partner, and it's allowed our members to do things like, you know, I can check this, my claims from the HealthEquity site, not just my HealthEquity claims, my insurance claims. I can look at what I should pay, maybe shouldn't pay, maybe should wait on, right? We've been able to drive a little bit of engagement, et cetera, right? That's nice. That's for me.
Our real opportunity going forward here is by virtue of the investments that we have made and will continue to make in the cloud, right, in other areas and of course in security. You know, our view is that going forward, we have the opportunity to turn this, what has been a competitive advantage in selling and in delivering more value into something that can actually help us drive both revenue and cost on the income statement. All of that starts with collaborating with an increasingly diverse ecosystem out there. We all know this. Anyone who comes to this conference, there are more and more companies out there trying to target consumers, looking to do things, you know, looking to engage with consumers for value.
It all starts with leveraging that growth in that ecosystem for the benefit of our consumer, right? Historically, that's been very transactional in nature, right? Going forward, our hope and expectation is that we will be able to use these, you know, to use the investments we've made technologically to have this drive both cost and revenue. Let me talk about what I mean by that. Today, with a few examples. Today, we have 15 million members. In most of our members, we are literally in their wallet, like there is a piece of plastic in their wallet, right? Some of you probably have one. Wave them around. No, don't do that. That's great, right? Actually, a way to look at it is, that's actually from a cost perspective, that's a source of friction, right?
We had to get you that piece of plastic. If the plastic arrived late, you called us, right? If there was a decline on the plastic, you know, because you didn't know your balance and, or it wasn't worth your time to check, right? That's all friction, right? The technology that we have access to today, that we can embed in today can allow us to eliminate that friction. We can get that card quickly onto your mobile. You can start using it, and so forth. Similarly, many of you have probably filed a claim with us if you were in one of our FSAs or whatnot, right? The technology that we have today can allow us to get to a place where Today, you can take a picture, and that goes to our claims world.
Tomorrow, it's gonna be your take a picture that's gonna be instant, and it's going to be, okay, where do you want us to send the money? You want us to keep it in your HealthEquity wallet? Or your health, you know, in your HealthEquity component of your wallet. Do you want us to send it to you by Venmo? What do you want? Right? The first element of this is gonna be about eliminating friction, and that reduce costs, particularly when you look at the fact that if you look at our service line that we report and the expense component of that, some of that is wonderful education for our members. We love that part, but a lot of it is friction, right? That's the cost side.
On the revenue side, though, there's more that we can do and more that other ecosystem partners want to do with that component of your wallet. It boils down to more transaction opportunity, right? More opportunity to capture more spend of our existing members, and then more opportunity to provide value to people, even people who don't have an HSA, don't have an FSA, et cetera, commuter, but are employees of our partners and clients. This is a little bit forward. You'll hear more about this over the course of this year and next, right? What I want to leave you with is the idea that we are kind of graduating from an ecosystem that, to put it, you know, very tactically, was built originally on flat files going back and forth. People at this conference talk about integration.
What integration usually means is a bunch of flat files. That's great, it doesn't really allow us to add value or truly reduce friction, right? To an integration that's in the cloud, that's leveraging both APIs and AI, now I'm into the jargon now, to do things that are really valuable, to leverage our extraordinary member, client, and partner base. Okay. Is that like slide 10? It's almost 10 minutes. More than that, actually. Really yapping here. I didn't talk about rates yet, once. The reason I didn't talk about rates is because our goal 10 years ago was not to turn everyone who follows us into bond analysts or macroeconomic forecasters. A goal at which we have failed. Clearly. Yeah.
In fact, there may be some people in the room who are bond analysts or economic forecasters. We wanted to show you this to kind of like step way back and make a simple point, which is that if you look at what we promised on this topic years ago, it was a level of stability, and in fact, that's what we've delivered. Looking forward, yes, right, the peak of this rate cycle will be higher because the peak of the underlying rate cycle is already higher, right? Yep, that's true, right? Do I know exactly what the peak will be? No. Do I know it'll be a few years from now based on what we know in terms of our yields? Yes, right? In any case, we will manage this to stability, ups, down, sideways, and so forth.
We told you we would do that 10 years ago, and it's exactly what we've done. We have been able to add value there by things like our Enhanced Rates program that really did for the custodial line or is doing for the custodial line, what we hope to do for the other lines of revenue, with some of the things I've talked about earlier. Okay. What all that stability has allowed and that growth has allowed is it's allowed us to consistently offer you beats and raises, and these are the ones from this year, and this is where we are, and I'm obliged to show them. Then for fiscal 2024, our per...
Our early look that we were able to deliver this year sort of boils down to double-digit revenue growth and earnings growth that's substantially faster than that. That's pretty good. That builds on a foundation of what we've been trying to do over the course of a decade. This is my last callback, is this was the first slide of our presentation 10 years ago, in which, you know, what did we promise? We promised growth, we promised visibility, we promised... Oh, I forgot now. I'm, like, losing my mind. We promised profitability, and then we promised that it would be sustainable as measured by growth of our market share. We've delivered those things quarter after quarter after quarter, year after year after year, and we intend to continue to keep that promise. That's it. Thank you.
Great. Well, thanks for the presentation. We'll open it up now to Q&A. You know, I wanna start with a macro question because, Jon, I always love learning from your economics background, and you always have such great insight on the environment, so...
I thought we said we weren't gonna do this.
I know. I know.
No, let's do it.
I'm always excited to ask because, you know, Jamie talked in his keynote on Monday about, you know, the market kind of pricing in a recession, but the positives, you know, kind of still outweighing the negatives at this point. Maybe you could kind of give us your thoughts on that. If we do go into a recession, how does selling into employers change? You know, how do you talk to them about the value that you deliver?
I think we have a really interesting opportunity in that regard this year. The reason we have an interesting opportunity is that I think, by and large, the HR departments and benefits departments were a little later to the party than Wall Street was in terms of if you can call a recession a party. We're a little later to the idea of recession. When they were doing their planning for 1/1/2023, that planning was particularly the larger employers, was largely focused still on competitive labor markets and all those kinds of things.
The reason I think we now have a unique opportunity is that as we look at our early activities with clients into 2024, in particular, you start to see people now trying to play catch up, and it's really hard to play catch up, as we all know. That's one of the things that makes economic downturns that are preceded by inflation very challenging, right? The products that we offer are products that help people make ends meet. That's what they are, all of them, every one, right? Whether it's, you know, paying a little less for a commuter pass or for your parking when you go into the office, right? Or whether it's our core products around healthcare. They're all about helping people make ends meet.
Fundamentally, the conversations that we're having with clients as we start to look at 1/1/2024 are really about that. It's, I think why at the end of the year, we saw this surge in interest in the member engagement 'cause sort of that was what was left to do. I'm expecting to see a lot more of that going into 2024. That's, that's my feeling about what it really means for us.
Can you just help us understand, you know, the mechanics of what happens to your P&L in the event of a recession that, you know, people save more? How does that impact your business?
Here if you look at the 2020 downturn, I think the core point is that I would make is that our HSA business expressed in terms of accounts and so forth, kind of just chugged along. Account growth continued. It was a little slower than it might have been, but it continued along just fine. Asset growth actually accelerated because recessionary activity tends to increase savings rates, and that tends to increase particularly cash balances. Our core HSA business was very resilient to the last recession. Obviously, there's an interest rate impact, but as I said earlier, our goal is to manage that to stability.
I can remember very well at the beginning of 2020, people were like, you know, you know. We had people saying rates are gonna go to, you know, that your yields are gonna go to zero. We said, "No, they're gonna go to about 150," and that's where they went to. So that piece. So today, HSA is a bigger component of the total business than it was in March of 2020. We had just bought WageWorks, and so we were about 50/50 at that point, right. To this year, we're gonna be well over 60% HSA and growing, and that's the most resilient component. CDB has a lot of stuff that kind of moves around.
Mm-hmm.
Some of it's good and some of it's bad. COBRA can be good, right? You have employment contraction, right? That can hurt you a little bit on the FSA HRA side. So I think that's where we're a little more exposed in the context of where things get a little less predictable, including on the spend side, right? But I think the core point that I would make in terms of resiliency is that our core business, our growing business, the majority of our business showed itself to be even in, you know, what was a historically deep and sudden recession that obviously, you know, really put a smack to interest rates and all that, proved itself to be incredibly resilient.
You talked a lot about stability today. Can you talk about how the Enhanced Rates product is gonna help you with that when the rate party finally ends?
Enhanced Rates really it boils down to our HSA cash, which is still today, almost two-thirds of total of the $22 billion that we anticipate we will be managing by January 31st. Historically, that cash was almost all in deposit products. Enhanced Rates really involves moving some of that cash, giving our members the ability to move some of that cash into insurance products, right? With the same, you know, more or less same liquidity as cash.
The real benefit of Enhanced Rates is that it has enhanced the competitiveness for money, and in particular, has reduced our exposure to the idea that structurally within banking, like, there are going to be factors that are really based on decisions of the government that are always going to limit yields on deposits. That's from my perspective, the real benefit is one, it's increased competition for money, right? Which means that the party ends a little later, to your point.
Mm-hmm.
Right? Then two, right, is that it ultimately, I mean, is that again, from a stability perspective is two, is that, to the extent that over a longer period of time, right, you really do have some structural limitations on the value of deposits in banks, right? It gives us an alternative. I think over time, what you're gonna see from us is we've talked about, migrating give or take 10% of our business, on the HSA cash side a year into this product. I think that's gonna be a little faster.
Okay.
It really does work. Members like getting the extra interest, it adds some more flexibility to our business. It reduces our use of variable cash, that kind of thing. It's just a good thing.
Then one more on rates, and then I'm done, and we'll open it up to the room. That folks don't make the mistake again of plugging a zero in for your yield, what is the best proxy for rates or for the yield for your business?
I used to have a one-line answer to this. Now, I have to have a two-line answer. My old one-line answer, which still holds, is that if you look at what people tend to wanna know is, you know, what are we placing new money at, right? I think the best proxy for that is for the deposits is go to Bankrate. You'll look at what, like, you'll see those offers. Now we can't place, we can't call those same banks and say, "Listen, I'd like to do that for $100 million." Like, whoa, whoa. That's not what we meant, right? But if you look at those rates, those are a good proxy.
They tend to in good times like now, they tend to be something on the order of 125-ish basis points above average CD rates, which you can for three and five years, which you can get off Bloomberg. In tougher times, they tend to be more like 75 basis point premium.
Mm-hmm.
Right? That's the deposit side. On the Enhanced Rates side, you know, way to look at it is you're looking at a premium of between 50 and 75 basis points off of that. There are some differences, but the net result of all that, as you can see from the slide in the deck, is, you know, a level of stability where the peaks tend to lag the peaks of the underlying, you know, Treasury and so forth. The peaks aren't as high and the troughs aren't as low.
That's great. Any questions in the room? Just show it. She's bringing it up.
They got the mic.
Thank you.
We have this thing in our office where you throw it's like a ball, and you throw it, and it's got a microphone in it. It's really cool.
Next year. Is there any reason at all to be concerned that 75% of net new logo sales came from channel partnerships? Is there any plan to kind of diversify the employer client acquisition channels? If the answer is no, can you speak to a little bit about how you align incentives with your channel partners to kind of ensure continuity of those relationships?
Steve, you know, why don't you take that one?
Sure. Yeah. I mean, we think that there's just tremendous opportunity still in the channel partners. If you look at the percentage of our channel partners' commercial book of business that we've been able to penetrate over the years, it's actually still quite low. We think there's tremendous upside. We're getting better and better every year working with the channel partners. I mean, even Jon mentioned this Further acquisition, they've taught us a lot of things. I mean, Further, because they were embedded in a Blues plan before we acquired them, they've helped us understand here's some things we need to do to really reach out to these plans. I don't think there's much risk at all.
We do have, though, as if we have this guy, named Matt who's out in Virginia, and every sales huddle loves to point out, the wins that came via direct sell because he believes that that is a natural hedge against being totally channel dependent. If Matt were in the room, he would say, "Yeah, but don't, you know, not so fast," because we know that one of the ways to pull the market is to do direct sales through benefit consultants and brokers and things like that. I, you know, I don't think we're at risk much. Jon, anything you would add to?
No. I mean, the only other thing I'd add is I remember in the first few years I came here, there was a company called Catamaran, that was. Does everyone remember Catamaran? And that made a big deal in the pharmacy space. Made a big deal of the value of have taking a channel approach to sales and how it kept, you know, sales marketing expense under control and so forth. It turned out that was true, but there was real dependency on one partner, I think their name starts with a C. That might help you know who they are. That's not our world. We have over 200 partners.
There's no partner with enough, you know, kind of the total book that, it can really create, you know, substantial risk to the business or cause us to do things unnaturally. I think that's pretty helpful.
Jon, the numbers you put out this week, you know, nice, strong, low double-digit growth. How should we think about... We haven't seen the full- year numbers yet for market growth, but how should we think about, you know, that relative to the market growth and, you know, the market growth has obviously decelerated a little bit in the last couple of years. How do we think about, you know, underlying growth in the market and what's really driving that?
Yeah. I think the first part of that question is sort of, I'm gonna interpret it as do we think we gained market share this period? Yes, or we. The answer is, I mean, we obviously don't know, but the answer is yes. I'm hoping that the market did well at some level, in part, because if it didn't, we took a huge share of the market. I mean, that's great, but we want the whole market to do well, obviously.
Mm-hmm.
I suspect that in terms of accounts, in particular, the whole market grew in the kinda high single digits. When you translate that into revenue, right? Recognizing that, you know, ignoring the cyclicality of rates and so forth, is ultimately a function of accounts and assets. I kinda come back to Our view looking forward is that, you know, we should look at this market as having a pretty steady kinda 10% growth profile. I think that's a reasonable way to look at it. Again, ignoring the ups and downs of interest rates. Maybe I'll stop there and see where you wanna take it. That's kinda my take. I think we're...
You know, people will say, "What inning are we in of all of this?" With accounts, we're in the fifth inning, right? With our 30 million+ accounts, we believe that maturity is around 60. If we are able to, you know, do some more favorable things from a legislative perspective, maybe there's more opportunity there. From an asset perspective, You know, we're still in the second or third inning here, right? We're still talking about $3,000 average balances.
Mm-hmm.
There's a lot of opportunity for growth there.
I mean, does that grow with education? You know, that's something that you guys have always talked about is, you know, kind of helping people understand how to better utilize their HSAs. Do they understand that now?
It's a combination of three factors. I think one is just simply account maturity. Well, four factors. One is account maturity. The second is, of course, is the education that we and others do. The third is the macroeconomics we talked about that can either accelerate or retard that growth in any given year, right? you know, then the last, and I think the one that ultimately will be truly helpful, is kinda market norms at developing at the employer level. We try and do a lot to help give our clients rules of thumb about, you know, how people should deploy their cash and all that, meaning in terms of relative accounts and, you know, where you should put money in a 401(k), where you should be saving for healthcare.
You know, those don't develop quickly, and they don't permeate very quickly. I would guess if I asked people in this room, how many of you heard from your employer anything about a strategy for how you might deploy money in an HSA versus other kinds of savings, this year, that no hand will be raised. Anyone? That's where there's work to do.
Great. You said you were hoping someone would ask Dr. Neeleman about Pfizer. I'm gonna ask it. Can you give us some more details there and tell us about how that came to be?
I mean, look, we've been at this for a long time, and the HSA law was passed in 2004, end of 2003, January 1 effective date. So we're 19 years into this journey. We talked to Pfizer very early on, I mean, probably two, three years into HSAs. Jon, did you time that on purpose?
No, Siri said she doesn't know what you mean by that.
Okay.
She wants you to talk more.
Well, they didn't know what we meant when we talked about HSAs. Jon points out that, you know, Pfizer, one of the things they do for their colleagues, the folks who work for them, is they give them very low-cost pharmaceuticals. It's kind of like if you're working for an airline, you get very low-cost flights or free flights, if they'll actually deliver on that. They struggled with that because they said, "Look, we have a variety of people. We have people that make a lot of money in this company. We have people in manufacturing that make a lot less.
How can we make it fair for them?" They said also, "How do we deal with this whole issue around medications and things like that?" Thankfully, there was some work that was done, not on the legislative front, but in kind of a regulatory front, that allowed for employers to start to offer free medications for preventative care, and they kind of clarified it. They allowed people to not only get things like blood pressure-lowering medications, but also things to treat asthma and to treat diabetes and things like that.
Mm-hmm.
That was clarified through Treasury. Because of that, Pfizer finally said, "Okay, look, a lot of our meds that we offer can now be given to our colleagues for free or very low cost and not have them subject to the high deductible rules." That kind of took the edge off the high deductible issue. They said, "Well, what else can we do to make it more fair?" We started talking to them about matching, and frankly, their consultants stepped up and said, "Well, what about tiering the contributions and giving the higher income people less money in their HSA, therefore allowing the lower income people to have more money given to them in their HSA?" Which is a fantastic solution. I'm not telling you all employers do this, but there are sophisticated approaches.
When they did this, we all sat down, and they said, "Okay, this is the way we're gonna design it." We had some pre-meetings, and we said, "How do we wanna get the message out now?" They've done this fantastic plan design. How do we now tell people about it? There was this over/under bet, and it was kinda like around 15%, 17%. This is a company that never offered HSAs for 17 of the 19 years they were available. They said, "What's the over/under bet?" They thought it was gonna be around 15% or 20% and ended up doubling it. Jon pointed out over a third of their people signed up for it. Look, this is a constant education.
I mean, we should probably have a conversation with, Jamie Dimon about this, 'cause as far as I know, JP Morgan has never offered an HSA-
Never.
... to their people, which is absolutely ridiculous, but, you know, that's their choice. I think with some legislative work, some ongoing education, because naturally, employers tend to think that when you say the word high deductible plan in a sentence, that this is a less rich plan. I'm sure people like JP Morgan wanna give their folks, their associates a rich plan. We've proven with Pfizer and many, many other companies, a lot of the tech companies we serve and things like that you can actually have a very rich, thoughtful, safe plan for your people, even though it has an HSA. We can get there, but it takes education. If you wanna put us in touch with your head of benefits, we'd love to have that conversation with him again.
Great fan of HSAs.
Again, and again. 'Cause HSAs are great.
Yeah. You know, we have two minutes left, so I wanna ask you both, what are you most excited for in 2023?
Why don't you go first?
Look, I really believe that. You know, I went out and did a bunch of meetings right before the holidays with our health plan partners and some of our large employers as well. You know, there's been so much chaos with everything that's gone on with COVID, and you can imagine what they were doing two years ago. They weren't thinking about plan designs. Just to hear them lock in and say, you know, HealthEquity, you know, jury was out a little bit. You did this big WageWorks acquisition. You shut down all these platforms. That made us a little bit nervous, but you've come through that. Your service levels are better than they ever have been. Jon, maybe you should even talk about our service. I mean, we've had a fantastic year-end. Our team has pulled together remarkably.
I think if you combine the enthusiasm of our partners and our large clients with what we've been able to execute on, it gives us tremendous hope for the future. Knowing that, again, it's early innings. I, you know, fourth, fifth inning I think is right, but we've got some great innings ahead of us.
I'm glad you said all that because I was gonna. This is sorta how it works. Steve is like, Not Cap. What's his name? Iron Man, and I'm Jarvis. I'm gonna say what I'm excited about is I do appreciate the mentioning of, first of all, of our teammate, our teammates, and in particular, their job over this December and January. I know that no one in this room will really care about this unless you're a HealthEquity member, this team has done an incredible job this year and...
This team has done an incredible job this year, and as I think those who follow us closely know, you know, we struggled somewhat last year in the context of what was going on in the labor market and Omicron, and we were moving a bunch of platforms, as Steve said, and all that, and the team has just done outstanding. All right, I'll shut up. What I was gonna say that I'm excited about is the fact that we're on a really good, strong, solid baseline trajectory in terms of both top-line growth and earnings growth, and that we can deliver that while investing in technology for the future that is gonna be focused on our members. Like, that's a great position to be in at a time when there are a lot of companies that are not gonna have that option.
It allows us to bring talent, it allows us to try new things, it allows us to surprise you positively with both innovation and ultimately with results.
Great. Well, thank you so much to HealthEquity for sharing your time with us today, and thank you all for joining us.
Thanks.
Thank you.