Health Savings Administrators' New Custodian

[MBSC]

Quote:

Originally Posted by audreyh1 And what about the IRS contribution form for the HSA for 2015? We already got ours from HSA Bank, but not from the new custodian yet.

FWIW, my account is directly with HSA Bank and a banner on the account page says Form 5498-SA (contributions) will be available in May and Form 1099-SA (distributions) is currently available. The same page displays prior year and current year contributions.

Quote:

Originally Posted by Gone4Good But I did a quick back of the envelope calculation to see what kind of cost I'd incur by switching to something like HSA Bank & TD Ameritrade. The $5K dead money in cash requirement there really adds up over time.

Someone on Bogleheads did a calculation of leaving $5k at HSA Bank or investing it. It went something like:

Option 1: Leaving $5k at HSA Bank earns $10 (0.2%) interest per year.
Option 2: Investing the $5k at TDA requires overcoming $66 in annual fees and $10 in lost interest from option #1. As long as the $5000 earns more than $76 (1.52%), this option is better within HSA Bank.

[Gone4Good]

Quote:

Originally Posted by MBSC Someone on Bogleheads did a calculation of leaving $5k at HSA Bank or investing it. It went something like: Option 1: Leaving $5k at HSA Bank earns $10 (0.2%) interest per year. Option 2: Investing the $5k at TDA requires overcoming $66 in annual fees and $10 in lost interest from option #1. As long as the $5000 earns more than $76 (1.52%), this option is better within HSA Bank.

That's a fair analysis for $ already at HSA Bank. My task is to figure out what to do with money at HSA Admin. And on my first pass, HSA Admin's $45 fee < HSA Bank's $66 fee. So easy call, right?

But that misses one huge thing . . .

HSA Admin also charges a 2.5bp per year Custodial Fee. For me that dwarfs the other fees.

But it looks like HSA Bank also charges $25 for each wire contribution, which I'll want to do at least once per year. And I can't quite tell what I'll pay at TD Ameritrade in commissions for buying or exchanging funds.

So is it all worth the P.I.T.A. to switch? Maybe.

[jarts98]

Quote:

Originally Posted by Gone4Good But it looks like HSA Bank also charges $25 for each wire contribution, which I'll want to do at least once per year. And I can't quite tell what I'll pay at TD Ameritrade in commissions for buying or exchanging funds.

I'm with HSA Bank / TD Ameritrade (I was with HSA Administrators previously, but their new, higher fee structure ran me off). My bank account is linked to HSA Bank so I can make contributions on-line at no cost (and avoid the wire fee). I invest in Vanguard ETF's on the TD Ameritrade no-fee list. As the name implies, I don't pay a commission or fee.

jarts98

[Gone4Good]

Quote:

Originally Posted by jarts98 My bank account is linked to HSA Bank so I can make contributions on-line at no cost (and avoid the wire fee). I invest in Vanguard ETF's on the TD Ameritrade no-fee list. As the name implies, I don't pay a commission or fee. jarts98

Good info. Thx.

[audreyh1]

Quote:

Originally Posted by MBSC FWIW, my account is directly with HSA Bank and a banner on the account page says Form 5498-SA (contributions) will be available in May and Form 1099-SA (distributions) is currently available. The same page displays prior year and current year contributions.

Except that we already received our 2015 forms 5498-SA from HSA Bank for the partial year they were custodian. Now waiting on the other half from the new custodian.

[Fedup]

I just opened an account at HSA bank, how long does it take before I get an account? It seems unusually long.
My HSA account has been sitting at a credit union, earning meager rate, I have no idea how much. I'm now retired and can take care of the transferring, I want to use it to trade with TD trade.


Sent from my iPad using Early Retirement Forum

[explanade]

Did these morons change the web site again?

I see no way to set up an event to transfer money into the account now.

[audreyh1]

Quote:

Originally Posted by explanade Did these morons change the web site again? I see no way to set up an event to transfer money into the account now.

In the main bar at top click on PROFILE, select MY PROFILE

Then a little lower several more clickable bars appear, one of which is SCHEDULED EVENTS

You should be able to add a scheduled event. You might need to click on BANKING INFORMATION first, and add that info.

I don't see any web site changes.

Hope this helps......

[explanade]

Thanks, what a convoluted mess.

[Fedup]

I finally got something from HSA bank. They do take a long time.


Sent from my iPad using Early Retirement Forum

[explanade]

Scheduled event worked.

Anyone get a document showing the transaction, like shares, cost basis, etc.?

The latest statement I have is dated 1/16/16.

Oh I found recent transactions.

What is the difference between Admin Fee and Custodian Fee? The first is $45 but I'm getting dinged for a couple of bucks every month or quarter by the latter.

[explanade]

Do we need to worry about tracking cost basis, specifically any dividends in addition to the annual contributions you make?

As long as you withdraw for qualifying expenses, you don't pay any taxes?

And if you don't do any withdrawals, it just rolls over?

Because HSA Administrators is also bad about showing actual transactions.

[audreyh1]

Quote:

Originally Posted by explanade Do we need to worry about tracking cost basis, specifically any dividends in addition to the annual contributions you make? As long as you withdraw for qualifying expenses, you don't pay any taxes? And if you don't do any withdrawals, it just rolls over? Because HSA Administrators is also bad about showing actual transactions.

It's like an IRA in that respect (in the case of only pre-tax contributions). No cost basis. Only withdrawals count for tax purposes.

What you don't withdraw stays in the HSA account until you pass it on to a beneficiary.

You can completely choose how to use the money. You can withdraw for eligible medical expenses and pay no taxes, or after age 65 you can withdraw it for any other reason, and pay taxes like on an IRA withdrawal, or you can leave it in the account.

[explanade]

How do you calculate the taxes on the withdrawals though?

Beyond the contributions, there are dividends and then there are custodian fees and other fees.

HSA Administrators documentation makes all these transactions hard to track.

[audreyh1]

Quote:

Originally Posted by explanade How do you calculate the taxes on the withdrawals though? Beyond the contributions, there are dividends and then there are custodian fees and other fees. HSA Administrators documentation makes all these transactions hard to track.

You ignore all fees paid, all dividends within the account. This is a tax-deferred account, like an IRA. Only what is withdrawn from the account matters for taxes. And if for qualified medical expenses, no taxes or penalties.

On the form 8899 for Health Savings Accounts there is a section (Part II) to fill out distributions taken from the HSA account each year. You also put the total of your qualified medical expenses you paid on this form. You have to keep up the paperwork yourself documenting these expenses, and remembering that you have claimed them.

If you are under 65, there are penalties associated with distributions from an HSA account above qualified medical expenses. Any non-zero result from form 8899 goes to your 1040, and that's where taxes are calculated.

So you don't need to worry about tracking what is inside the account for tax purposes. There is no concept of cost basis that needs to be adjusted for fees or reinvested dividends or anything. As far as the IRS is concerned, it's a black box. They only care what you put in and what you eventually take out.

I keep track simply to enter in Quicken so that I know how much I have in the account at any given time, and reconcile that with transactions reported. But I don't have to report any of that stuff.

[explanade]

Ah makes sense.

So for withdrawals after 65, it's treated as part of your income, unless you can document that it's for medial expenses.

What if you redeem some shares to keep in a cash account to do the withdrawals? Those transactions aren't treated as taxable events unless you withdraw the proceeds?

[audreyh1]

Quote:

Originally Posted by explanade Ah makes sense. So for withdrawals after 65, it's treated as part of your income, unless you can document that it's for medial expenses. What if you redeem some shares to keep in a cash account to do the withdrawals? Those transactions aren't treated as taxable events unless you withdraw the proceeds?

There is a cash account inside the HSA account from which you can withdraw funds by using the debit card, or ACH transfers. Proceeds from selling any investments will be deposited in this account and then are available for withdrawal or reinvestment.

Since that's inside the HSA there are no tax implications until you actually withdraw the funds.

[explanade]

No statement for the first quarter of this year.

But they've docked some shares for fees.

No way to track these, because there's no transaction history apart from the statements.

Well there is transaction history to 9/1/2015 but nothing since.

[audreyh1]

Quote:

Originally Posted by explanade No statement for the first quarter of this year. But they've docked some shares for fees. No way to track these, because there's no transaction history apart from the statements. Well there is transaction history to 9/1/2015 but nothing since.

It's there. I don't remember the exact online menu, but you can get the transaction history to a given time range, and that's what I use to enter them in Quicken. The statements are missing critical info.

[easysurfer]

I've pretty much given up on making sense out of the statements .
Their website and their statements are so very disjointed.