HSA question

[Alex The Great]

My question is towards ACA plans. In particular those like BCBS of California or Anthem BC PPO. They do have high deductible plans available. But does it matter where do I have HSA? My current employer's UHC plan require to have HSA at Optim bank which has fees and very limited investment choice. I wonder may I have HSA at bank of my choice (for example Fidelity) with ACA plans, to contribute into it? It would be nice if someone can share a personal experience.

 

[qwerty3656]

I have ACA insurance and an HSA at Fidelity. No issues. I would think your bigger issue is your employer probably pays for at least part of the UHC plan. I don't think ACA will give you any kind of subsidy if you have an employer plan available.

 

[bloom2708]

HSA are individually owned. You can have as many HSA accounts as you want/need.

At some point it may make sense to consolidate based on investment options and fees.

How you split your $7,300 if you are married can be any ratio 50/50, 25/75, 100/0 etc.

We have 2 previous employer HSA with Optum, my new company used a different HSA provider and now we were acquired, so will be using a 4th HSA provider.

At some point I will attempt to consolidate or spend the smaller ones down.

 

[RetiredAndLovingIt]

I had a HSA eligible Bronze Kaiser ACA plan in 2020 and opened my HSA at my local credit union.

 

[MichaelB]

My question is towards ACA plans. In particular those like BCBS of California or Anthem BC PPO. They do have high deductible plans available. But does it matter where do I have HSA? My current employer's UHC plan require to have HSA at Optim bank which has fees and very limited investment choice. I wonder may I have HSA at bank of my choice (for example Fidelity) with ACA plans, to contribute into it? It would be nice if someone can share a personal experience.

It does not matter which financial institution administers your HSA. It’s not even clear how the employer can require a specific bank, unless they contribute to the account. Even then, you could have two accounts, one at Optimum and the other at Fidelity, and contribute to both, as long as the total contribution is within the limits.

 

[cathy63]

My question is towards ACA plans. In particular those like BCBS of California or Anthem BC PPO. They do have high deductible plans available. But does it matter where do I have HSA? My current employer's UHC plan require to have HSA at Optim bank which has fees and very limited investment choice. I wonder may I have HSA at bank of my choice (for example Fidelity) with ACA plans, to contribute into it? It would be nice if someone can share a personal experience.

Are you planning to leave your current employer? If your employer offers you an HSA, they should also be offering you a high deductible health plan. Generally it does not make sense to purchase ACA insurance while you are employed.

If you do leave your current employer, then you can move the HSA anywhere you want to. Fidelity is a good choice because all your money is in a fee-free brokerage account with their full range of investment choices available to you. There's no transferring back and forth between bank and investment accounts and no minimum balance before you can invest.

 

[Alex The Great]

Thanks for all feedback! I really appreciate it. Yes my current employer require HSA at Optum bank because there is a company match. Obviously I will apply for ACA insurance when I retire and I won't have current UHC plan anymore. According to the feedback, it looks like I should be able to transfer money from Optum bank into my existing Fidelity HSA (left from previous employer) to consolidate it and use Fidelity HSA with ACA high deductible PPO plans. Please correct me if I'm wrong.

 

[Aerides]

^
Yes to all that. That's how it should work.

Your existing HSA provider might be tricky to transfer, but assuming you can, Fido is the best place for it. And if you can't move it, just burn it down first.

 

[SecondCor521]

Thanks for all feedback! I really appreciate it. Yes my current employer require HSA at Optum bank because there is a company match. Obviously I will apply for ACA insurance when I retire and I won't have current UHC plan anymore. According to the feedback, it looks like I should be able to transfer money from Optum bank into my existing Fidelity HSA (left from previous employer) to consolidate it and use Fidelity HSA with ACA high deductible PPO plans. Please correct me if I'm wrong.

You're correct. You can do a direct transfer from Optum to Fidelity to consolidate with no tax consequences (other than perhaps dealing with two different 5498-SA forms that year).

 

[swakyaby]

I used to have Optum bank HSA for a few years while on an ACA high deductible insurance plan, and like you, I didn’t like the monthly fees, cash balance requirements, and limited investment options. As soon as Fidelity offered their no fee HSA, with no minimum cash balance, and wide investment options including some zero cost mutual funds, I contacted Fidelity to arrange a direct transfer from one HSA into theirs. It took some time, but the transaction was smooth and free. Of course, if you want to pay for some health care expenses, you do need to move enough from your invested HSA mutual funds to the cash portion of your HSA.

 

[Morgan22]

Not sure if you know, when looking on the coveredca.com site make sure you pick a plan that is qualified to use an HSA with. These plans are usually bronze plans, have HSA in the name of them, and the deductible shows as $14,000.

When we first moved to CA we signed up for a bronze HSA plan and I contributed directly to my newly opened Fidelity HSA. No issues at all.

Another thing, my understanding is that CA treats your HSA as a taxable account. If you invest in anything other than Treasuries, you will need to report the interest/dividends/cap gains on your CA tax return every year.

 

[Irishgirlyc58]

I just helped my son get signed up for the same plan yesterday so I went in and checked on the blue shield site.
It says that you can open an HSA at your bank or other financial institution. This is good news since my son already has an account with Fidelity.

I have an HDHP through my former employer and that one has the HSA account attached to the health insurance. I don’t think the charge is too bad- $2.25/month.
I go on Medicare this coming September so I guess I better put research where to move my HSA funds once that happens.

 

[cathy63]

Not sure if you know, when looking on the coveredca.com site make sure you pick a plan that is qualified to use an HSA with. These plans are usually bronze plans, have HSA in the name of them, and the deductible shows as $14,000.

When we first moved to CA we signed up for a bronze HSA plan and I contributed directly to my newly opened Fidelity HSA. No issues at all.

Another thing, my understanding is that CA treats your HSA as a taxable account. If you invest in anything other than Treasuries, you will need to report the interest/dividends/cap gains on your CA tax return every year.

Yes, that's true about California taxing the income in HSAs. You also cannot deduct the HSA contribution from your CA income. The legislature has had bills introduced to make CA tax code conform to Federal code on HSAs, but they never seem to get out of committee.

On the Covered CA website, you can check the "Health Savings Account (HSA)" box in the left nav to filter the selections to only the qualified plans. In my zip code, they're all bronze. The deductible is $7K if you're single, $14K if married.

 

[Irishgirlyc58]

What I can’t figure out is why the Blue Shield Silver HDHP is not offered through Covered CA.
It appears to meet the ACA requirements and the high deductible is $2600.
My son isn’t getting any subsidy so I’m wondering if the HDHP Silver plan would be a better deal for him.

 

[SecondCor521]

What I can’t figure out is why the Blue Shield Silver HDHP is not offered through Covered CA.
It appears to meet the ACA requirements and the high deductible is $2600.
My son isn’t getting any subsidy so I’m wondering if the HDHP Silver plan would be a better deal for him.

I'm not in CA, but in my zip code there are 10 HSA compatible plans, but they are all Bronze level.

I suspect that there is some inherent conflict between the HSA requirements and the Silver ACA requirements. Either that, or there is not enough market demand for a Silver HSA-compatible product.

 

[Alex The Great]

What I can’t figure out is why the Blue Shield Silver HDHP is not offered through Covered CA.
It appears to meet the ACA requirements and the high deductible is $2600.
My son isn’t getting any subsidy so I’m wondering if the HDHP Silver plan would be a better deal for him.

I think it depends on zip code. In my area, there is just one PPO silver plan offered through ACA with low deductible but very high premium: BS of California Silver 94 PPO. As regarding HMO or EPO plans their network is smaller than PPO and you may end up paying more even if premiums are lower. It all depend how often you go to doctors.

 

[Irishgirlyc58]

I think it depends on zip code. In my area, there is just one PPO silver plan offered through ACA with low deductible but very high premium: BS of California Silver 94 PPO. As regarding HMO or EPO plans their network is smaller than PPO and you may end up paying more even if premiums are lower. It all depend how often you go to doctors.

I found this on Covered CA re the silver 94 plan:

4 Types of Silver Plans
There are four levels of Silver Plans: Silver 70, Silver 73, Silver 84, and Silver 94. The Silver 70 Plan covers standard benefits. The other silver plans are called “Enhanced Silver Plans”. They offer extra discounts so members pay even less for medical services. Not everyone qualifies for enhanced silver plans. Eligibility is based on income, age, family size, and zip code. Generally, adults with an income of just above 138% to 250% of the Federal Poverty Level may qualify for enhanced benefits.

 

[cathy63]

What I can’t figure out is why the Blue Shield Silver HDHP is not offered through Covered CA.
It appears to meet the ACA requirements and the high deductible is $2600.
My son isn’t getting any subsidy so I’m wondering if the HDHP Silver plan would be a better deal for him.

If he won't qualify for cost sharing subsidies or premium tax credit subsidies, then it makes sense to purchase outside the exchange if he can get a better price that way. All plans have to cover the things that are required by ACA, regardless of how they're sold (except for some catastrophic plans or grandfathered plans, which this is not).

 

[Irishgirlyc58]

If he won't qualify for cost sharing subsidies or premium tax credit subsidies, then it makes sense to purchase outside the exchange if he can get a better price that way. All plans have to cover the things that are required by ACA, regardless of how they're sold (except for some catastrophic plans or grandfathered plans, which this is not).

Yeah- I was thinking that going through the exchange would give better rates long term. Cov CA has done a decent job with keeping premium increases to a dull roar.
I’m going to do an analysis of the silver HDHP plan and see what I come up with.
I love doing things like this.