Where to open a Health Savings Account and another question

[spncity]

Two things:

1. Where do you have your HSA?

A local bank wants $18 to open and $35 to close such accounts with interest of 0.05%. There is an ATM card that can be used to purchase qualified items.

A concern affiliated with our ACA plan (Benefit Wallet) is free to open and close, but if your balance goes below $1,000 there is a $5 monthly fee. The interest is similar. They also provide ATM cards. I did do the paperwork, but have not funded anything here (so they are not charging the $5 fee at the moment and I could close this and open elsewhere).

Schwab does not offer HSA accounts.

I don't really need the cards. I can track and reimburse. Could use suggestions on where to set up.

2. I believe I have to have an account "open" before incurring reimbursable expenses. Does the above qualify? I don't know if I have to have put any $ into the account before incurring costs. Interested in comments here.

Thanks!

 

[RunningBum]

http://www.early-retirement.org/forums/f38/hsa-accounts-74837.html is a good thread on options. The fees mentioned may or may not still be current. See if there's a local credit union available to you, which may have a free account. Mine does.

Some of us track expenses for eventual reimbursement, but pay out of pocket to let the HSA account grow tax free, and also stay above the account minimums to reduce/eliminate fees. There is no time limit on reimbursements, and you can also use your HSA account to pay medicare premiums.

With a lower balance, keeping fees minimal is the most important. If you let your balance grow, investment options may become more important.

 

[MBSC]

Here are two additional threads on HSA options.
http://www.early-retirement.org/forums/f28/reasonable-hsa-fee-cheaper-options-76445.html
http://www.early-retirement.org/forums/f38/recommend-an-hsa-administrator-69579.html

The answer to your second question can be found in IRS Publication 969:

For HSA purposes, expenses incurred before you establish your HSA are not qualified medical expenses. State law determines when an HSA is established.

Source: https://www.irs.gov/publications/p969/ar02.html

The IRS released a bulletin providing additional details:

VI. ESTABLISHING AN HSA

Q-38. When is an HSA established?
A-38. An HSA is an exempt trust established through a written governing instrument under state law. Section 223(d)(1). State trust law determines when an HSA is established. Most state trust laws require that for a trust to exist, an asset must be held in trust; thus, most state trust laws require that a trust must be funded to be established. Whether the account beneficiary’s signature is required to establish the trust also depends on state law.

Source: https://www.irs.gov/irb/2008-29_IRB/ar11.html

 

[NW-Bound]

I have had an HSA account with Optum Bank for perhaps 10 years. There's no fee if your account balance is above a certain amount, which ours always is. You can also buy Vanguard MF's in your HSA.

They give me a card which I give to healthcare providers to charge, just like any other credit cards. Never use it to get cash, though it might be possible.

Optum Bank was recommended by our pre-ACA health insurance, and we funded it with the same monthly payment made to the health insurer. The excess amount over the premium goes into the HSA. Our current ACA insurer does not do that, so we have to fund the HSA separately.

 

[Done]

For an HSA as a plain savings account, Alliant Credit Union pays 0.65% as long as your balance is over $100. No fees, free debit card, checks and online bill pay. http://www.alliantcreditunion.org/bank/health-savings-account


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[spncity]

follow-up question

The IRS released a bulletin providing additional details:
Source: https://www.irs.gov/irb/2008-29_IRB/ar11.html

Thanks all for the comments.

So - about that word "funded". Does "funded" mean if you have at least a few bucks in the account before the reimbursable medical event occurred? Or do you have to have deposited as much $ as the medical expenses you expect to self-reimburse "before" the date they - the expenses - occurred?

Like others, I'd plan on leaving the money there for the future - but if something bigger happens, well...

 

[Gone4Good]

I have had an HSA account with Optum Bank for perhaps 10 years.

Do you know what the difference is between their eSaver "investment" account that charges no fees and their eInvestor account that charges $2.50 per month?

Like most HSA providers, the disclosures on their website is really terrible. I can only assume that eSaver is their bank account and eInvestor is what you need to invest in mutual funds. But both are listed under "Investment Accounts" with a disclaimer that they're not FDIC insured so . . .

 

[MBSC]

So - about that word "funded". Does "funded" mean if you have at least a few bucks in the account before the reimbursable medical event occurred? Or do you have to have deposited as much $ as the medical expenses you expect to self-reimburse "before" the date they - the expenses - occurred?

You only need to deposit $1 (or the custodian's minimum if higher) for the HSA to be funded and established. There is no time limit to accrue the funds needed to cover an approved expense.

 

[audreyh1]

You only need to deposit $1 (or the custodian's minimum if higher) for the HSA to be funded and established. There is no time limit to accrue the funds needed to cover an approved expense.

HSA bank actually does this for you when you open the account online. They put a dollar in for you. That was nice.

 

[Mulligan]

HSA bank actually does this for you when you open the account online. They put a dollar in for you. That was nice.

Michael got me on this HSA after mine was closing down last year. Very pleased with it and love the $9.99 stock trade brokerage account link to it... Depends on ones needs, but this HSA that I have is no healthcare fund... It is a long term triple tax haven bonus retirement account... Any presidential candidate that would openly support a 20k annual HSA contribution limit would get my vote.


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[Nunthewiser]

https://www.lmcu.org/banking/savings/savings_hsa.aspx

I opened one here. Anyone can join. No fees and 1.5 to 2% rate

 

[spncity]

HSA bank actually does this for you when you open the account online. They put a dollar in for you. That was nice.

What happened on mine it seems, is they deposited 1 cent and withdrew 1 cent. Still, it made it "active" at the time it was opened.

Kindest regards.

 

[Morgan22]

You can look around hsasearch.com to see what interest rates and fees are on various HSA providers. It also shows minimum balances required and whether you can invest in mutual funds or not.

 

[gauss]

I like selectaccount for an HSA so far.

For a $1.50 per month fee I get access to a Charles Schwab brokerage account.

 

[MooreBonds]

I like selectaccount for an HSA so far.

For a $1.50 per month fee I get access to a Charles Schwab brokerage account.

I currently pay $5.50/month with HSA Bank for the luxury of having a low balance and a TD Ameritrade account. I was excited about your comment..but also noted that you have to upgrade your selectaccount to a "ThriftSaver" account, which incurs an additional $1/mo fee.

Still, the $2.50/mo total is cheaper than I'm paying, and I'll probably switch to save $36/year. Thanks!

 

[ownyourfuture]

I like selectaccount for an HSA so far.

For a $1.50 per month fee I get access to a Charles Schwab brokerage account.

So a person can invest HSA contributions into stocks,funds, ETFs, etc. ?


I haven't opened a HSA yet, but I was assuming since it's a tax-deferred instrument, that's only supposed to be used for medical related expenses, the government would regulate it in a way that would only allow you to put it into things like certificates of deposit, and/or money market accounts that are FDIC insured.

 

[audreyh1]

So a person can invest HSA contributions into stocks,funds, ETFs, etc. ?


I haven't opened a HSA yet, but I was assuming since it's a tax-deferred instrument, that's only supposed to be used for medical related expenses, the government would regulate it in a way that would only allow you to put it into things like certificates of deposit, and/or money market accounts that are FDIC insured.

Nope. Depends on the custodian. But some offer Ameritrade brokerage as an investment option, so I assume you can buy anything there (but perhaps not on margin), and some offer a wide range of Vanguard funds. FDIC insurance is not required.

And once you reach 65 you can take funds out even for non medical expenses. You just have to pay tax on what you withdraw as if it were an IRA. So in many ways they are like IRAs.

 

[stlguy57]

You can review over 300 HSA providers by going to hsasearch.com based upon different criteria.

Might be helpful to some of you here. Good luck

 

[ownyourfuture]

Nope. Depends on the custodian. But some offer Ameritrade brokerage as an investment option, so I assume you can buy anything there (but perhaps not on margin), and some offer a wide range of Vanguard funds. FDIC insurance is not required.

And once you reach 65 you can take funds out even for non medical expenses. You just have to pay tax on what you withdraw as if it were an IRA. So in many ways they are like IRAs.

I signed up through HSA Bank today.
Fees/charges are substantial, but can be avoided in most cases.
http://hsabank.com/~/media/files/cdh/fees/fees_standard_2_50

Interest rates very low, but..........
I have access to TD Ameritrade
HSA Investments - HSA Bank

Good luck

 

[ownyourfuture]

https://www.lmcu.org/banking/savings/savings_hsa.aspx

I opened one here. Anyone can join. No fees and 1.5 to 2% rate

I spoke to a rep today, & was quoted 0.50% on $4,999.99 & below, & 1.00% on $5000.00 & above. Maybe you have a very large $ account, & those rates you quoted apply to that amount ?

 

[gretah]

I get the same info at LMCU.org

Can anyone beat 1% guaranteed?

 

[gauss]

So a person can invest HSA contributions into stocks,funds, ETFs, etc. ?


I haven't opened a HSA yet, but I was assuming since it's a tax-deferred instrument, that's only supposed to be used for medical related expenses, the government would regulate it in a way that would only allow you to put it into things like certificates of deposit, and/or money market accounts that are FDIC insured.

It looks a lot like a standard (non-margin) brokerage account. I put the entire balance into VTI (ie Vanguard Total Market ETF). It cost me $8 for the trade.

For $2.50/month it is one of the most reasonable priced HSAs out there that doesn't force you to invest in a limited suite of high cost mutual funds.

I will probably just let the balance grow indefinitely if the laws don't change because under current law you can retroactively take tax-free distributions to pay for qualified medical expenses. The expenses need to be after you establish and HSA so I should be good going back to the mid 2000s or so.

-gauss

 

[RunningBum]

I get the same info at LMCU.org

Can anyone beat 1% guaranteed?

I get 1.5% guaranteed with no fee at Coastal24.com but it'd cost you $18 to join through a non-profit contribution unless you meet one of the employer or resident criteria, which is mostly in the Carolinas.

 

[Months.in.Wyoming]

Optum is for HSA savers

One of the best attributes of HSA is that these are the best vehicles for retirement savings. If you need cash flow to cover health expenses best to have an emergency fund post tax and build that by lowering your Roth or 401(k) contributions before taking anything from the 5500/6500 you can put in HSA. They are post tax, it grows tax free, and it comes out tax free (for medical). So if you ask for a great HSA - I take that as asking "Where is the best place to stash long-term money?"

Like NW-Bound - i'm very happy with the fund selections at Optum - Blackrock and Vangaurd - for example. My HSA is up 13.4% this year!

 

[Mulligan]

One of the best attributes of HSA is that these are the best vehicles for retirement savings. If you need cash flow to cover health expenses best to have an emergency fund post tax and build that by lowering your Roth or 401(k) contributions before taking anything from the 5500/6500 you can put in HSA. They are post tax, it grows tax free, and it comes out tax free (for medical). So if you ask for a great HSA - I take that as asking "Where is the best place to stash long-term money?"



Like NW-Bound - i'm very happy with the fund selections at Optum - Blackrock and Vangaurd - for example. My HSA is up 13.4% this year!

I read an article years ago that opened my eyes on HSA's... It basically said... "Money is fungible. You dont invest in HSA's for your health, you invest in them to save on your taxes, use this to your advantage and invest proceeds as you would a retirement account". And this is what I do...