SALT LAKE CITY — As a practicing surgeon, Dr. Stephen Neeleman was well-positioned for a clear view of where health care costs were headed in the early 2000s, and that direction was up.
He also believed that new pathways would evolve to give consumers better options to deal with those escalating costs and, in 2002, launched one of the first U.S. companies dedicated to managing evolving fiscal tools for health care expenses.
On Wednesday, MountainWest Capital Network honored Neeleman with its annual Entrepreneur of the Year award, recognizing the stellar success of his company, HealthEquity, and its evolution to become one of the leading nonbank trustees of consumer health savings accounts.
In a Deseret News interview, Neeleman said the vision behind the launch of HealthEquity was a health care-focused saving mechanism that would help address both short-term expenses during consumers’ working years and postretirement medical costs.
“When we started, we knew that health care was going to be heading down this road of higher costs and higher dissatisfaction,” Neeleman said. “When we started the company, we said, ‘How can you come up with a solution that provides fantastic service ... and also helps people save for their retirement.’”
The first hurdle for Neeleman and his HealthEquity team was advocating for federal regulatory changes that would pave the way for just such a tool. That work included educating congressional leaders prior to the passage of the Medicare Modernization Act in 2003. The act established legislation supporting health savings accounts that allowed consumers to make limited, tax-free contributions to an account dedicated to covering health-related expenses.
Thanks to the meteoric rise of high-deductible health plans across the U.S., health savings accounts have been on a similar growth track, and Kaiser Family Foundation data indicates some 30% of U.S. employees were covered by high-deductible insurance plans in 2019, up from less than 5% in 2005, and some 25 million Americans have active health care savings accounts. Industry watchers say those account numbers are likely to jump as much as 20% in the coming year.
While Neeleman took the Draper-based company public in 2014, raising over $100 million on a valuation well under $1 billion, HealthEquity has since been on a growth tear and, at the close of regular trading Wednesday, had a market capitalization nudging $5 billion.
MountainWest Capital Executive Director Cheri Waldron said Neeleman typifies just the kind of traits her firm is looking to honor with the annual entrepreneur award.
“Dr. Steve Neeleman has that entrepreneurial spirit MWCN strives to honor and celebrate. He has a vision that translates into something much bigger than himself and impacts change and improves the lives of so many,” Waldron said in a statement. “With HealthEquity, his influence is far-reaching, not only with those team members who work here in Utah and across the country, but with the millions of Americans who rely and benefit from the products and services the company provides.”
Neeleman comes from a family of entrepreneurs, having spent much of his youth working at his grandparents’ 24-hour grocery store in Salt Lake City and later working with his brother David Neeleman on his first airline endeavor in Utah, Morris Air. David Neeleman would go on to launch JetBlue and other businesses, including the new Breeze Aviation which will be headquartered in Utah.
Stephen Neeleman said those experiences, coupled with what he learned as a practicing medical professional, helped illuminate the road that led to HealthEquity.
“I realize the typical path to entrepreneurship may not include a stop through medical school, but my story just proves anyone can make a difference by recognizing a challenge and continually working to improve it,” Neeleman said in a statement. “I have partnered with remarkable people through every phase of my career and am grateful to our team members at HealthEquity who demonstrate “Purple” service every day, connecting health and wealth for our members across the country.”
Neeleman completed his undergraduate degree at Utah State University, earned his medical degree at the University of Utah and completed surgical training at the University of Arizona, where he later became an assistant professor of surgery.