As compared to whom?I've looked at them, but their $45 annual fee turned me off. There seems to be no way to avoid it, either, whether with a minimum balance or online statements.
As compared to whom?
All the other custodians that offer investment opportunities such as Chase, or HSA Bank with its Ameritrade account charge extra monthly fees for them on top of their bank account fees which add up. The JPMorgan and American Century mutual funds offered through chase have much higher expense ratios.
That's how things seem to be leaning....I've not seen a (non-employer based) HSA account anywhere that didn't have high fees. If the intention is to leave the money invested and defer use to the future, HSA bank and HSA Adminstrators look like good options.
So for 2014, if you have $5000 in your HSA Bank account (earning 0.4%), you don't pay any additional monthly fees to have a linked TD Ameritrade account?HSAbank waives all the fees provided you keep a specified balance parked in the bank account. The required amount started out at $3K a few years ago, and has slowly crept up. Now they have put it on auto-pilot and tied it to the contribution limit itself! It is listed as the average of single and family HSA contribution limits. Very clever. It works out to about $5K/year of dead money with the zero interest rates at present. Any money above that, you can move to TD Ameritrade and invest.
If you don't have the required balance the fees are $2.50/month to keep the account, and an additional $3/month for investment account.
http://www.hsabank.com/~/media/files/fees_s1
Yeah, that $5000 threshold is pretty high, and at 0.4% APR it's earning you a whopping $20 a year.Fee or no fee, I'm happy to investing every dollar into Vanguard Funds with HSA Administrators, unlike some custodians where you have to have a larger bank balance before investment eligible.
Agreed, assuming you are planning to invest (i.e. not park the money in a savings account earning 0.5% at best). My plan has always been to have about 3 years of combined OOP maximums left as cash in my HSA and I really haven't accumulated enough money above that to justify the charges to invest the rest. There are quite a few places where you can get a "free" account if you have more than (say) $5K and you leave it in cash. Then again, one way or another you pay for it.I've not seen a (non-employer based) HSA account anywhere that didn't have high fees. If the intention is to leave the money invested and defer use to the future, HSA bank and HSA Adminstrators look like good options.
I think I'm going to pay medical expenses out of regular savings and use the HSA as a tax-free savings account for medical expenses after I'm 65.Agreed, assuming you are planning to invest (i.e. not park the money in a savings account earning 0.5% at best). My plan has always been to have about 3 years of combined OOP maximums left as cash in my HSA and I really haven't accumulated enough money above that to justify the charges to invest the rest. There are quite a few places where you can get a "free" account if you have more than (say) $5K and you leave it in cash. Then again, one way or another you pay for it.
One thing to be mindful of also, when looking at HSA investments, is that some HSAs charge a "transaction fee" every time you make a purchase. So if you are "dollar cost averaging" (so to speak) into an HSA with monthly contributions, you probably want to avoid any HSA that charges $10-20 any time you place a buy. It's not a big deal if you only do that once a year with thousands of dollars at a time, but it would be a real drag to be hit with a transaction fee every month!I think I'm going to pay medical expenses out of regular savings and use the HSA as a tax-free savings account for medical expenses after I'm 65.
One of the things that tripped me up in HSA was how to split my contribution and spouse's contribution. With all the talk about family HSA limit, I was lulled into thinking it can all be kept in one account. HSA treatment is just like an IRA and it is individually titled and tracked.
I think I'm going to pay medical expenses out of regular savings and use the HSA as a tax-free savings account for medical expenses after I'm 65.
So if we went with our state's Silver HSA family plan for 2014, we would have a $5000 family medical deductible, and an $8000 family OOP max. However, instead of having one $6,550 HSA to cover those costs, we will apparently need to have two individual $3,275 HSA plans. Since one of us tends to use medical services, and the other rarely uses medical services, splitting it that way is much less efficient than I had expected.
Right - only considering NTF options.One thing to be mindful of also, when looking at HSA investments, is that some HSAs charge a "transaction fee" every time you make a purchase. So if you are "dollar cost averaging" (so to speak) into an HSA with monthly contributions, you probably want to avoid any HSA that charges $10-20 any time you place a buy. It's not a big deal if you only do that once a year with thousands of dollars at a time, but it would be a real drag to be hit with a transaction fee every month!
Thanks, I had missed that aspect, though it is mentioned in the HSA Bank FAQ. Frequently Asked Questions - HSA Bank
So if we went with our state's Silver HSA family plan for 2014, we would have a $5000 family medical deductible, and an $8000 family OOP max. However, instead of having one $6,550 HSA to cover those costs, we will apparently need to have two individual $3,275 HSA plans. Since one of us tends to use medical services, and the other rarely uses medical services, splitting it that way is much less efficient than I had expected.
Are you sure about that?
and later in the same documentRules for married people. If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. If each spouse has family coverage under a separate plan, the contribution limit for 2012 is $6,250. You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouse's Archer MSAs. After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division.
So my revised tentative understanding is that based on the HSA Bank FAQ a husband and wife must have separate accounts. However, if the husband and/or wife is covered by a "family" high deductible health plan, then if both the husband and wife agree, you could split the "family" HSA contribution anyway you wanted between their two HSA accounts. You could also withdraw money from either account to pay for "Qualified" medical expenses incurred by either person.Qualified medical expenses are those incurred by the following persons.
- You and your spouse.
- All dependents you claim on your tax return.
- Any person you could have claimed as a dependent on your return except that:
- The person filed a joint return,
- The person had gross income of $3,800 or more, or
- You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2012 return.
Cedar, there's no doubt the second link you provided is incorrect on this, the IRS language clearly defines O-MAGI as starting from adjusted gross income, which excludes retirement plan contributions.
I wanted to thank Ziggy, Michael and 47Percent for helping to clear up the answer, “Does Traditional IRA contributions reduce your OMAGI which will help with subsidies”. IRS Rules are pretty clear that HSA contributions that reduce OMAGI but there are ambiguous readings in regard to TIRA’s. I believe everyone on this board now believes that Traditional IRA contributions will lower your OMAGI to help with subsidies. Thanks for everyone’s impute.
So the way I understand the catch up feature, if you split the HSA account into two accounts both you and your spouse could do the catch up extra contributions. So you could put in a total of $8450 this year?
It seems nigglingly odd (is that a adjective?) that the family limit is $50 less that the combined limits of two individuals. Why bother?
OK - thanks for the explanation. I'll expect it to vary +/-$25 from year to year then.I believe the law calculates the limits to the nearest $50 and family limits are calculated after doubling the individual limit.
So if the single limit in your case were (say) $4,280, then it would be rounded to the nearest $50 as ($4280 * 2) = $8560 which rounds to $8550 for a family, but rounds to $4300 individually.
It could work the other way, of course. If the limit went to $4,320 next year, for example, the single limit would be $4300 but the family limit would be $4320 * 2 = $8640, rounded to $8650 to the nearest $50.