HSA accounts

[explanade]

Asked Vanguard and they referred me to this page:

https://personal.vanguard.com/us/whatweoffer/overview/healthsavings

Which in turn links to this site:

Vanguard® Funds - Health Savings

From an earlier thread about HSA administrators:

http://www.early-retirement.org/forums/f38/recommend-an-hsa-administrator-69579.html

Sounds like nobody else is investing in VG funds through healthsavings.com?

 

[MichaelB]

Asked Vanguard and they referred me to this page:

https://personal.vanguard.com/us/whatweoffer/overview/healthsavings

Which in turn links to this site:

Vanguard® Funds - Health Savings

From an earlier thread about HSA administrators:

http://www.early-retirement.org/forums/f38/recommend-an-hsa-administrator-69579.html

Sounds like nobody else is investing in VG funds through healthsavings.com?

That's HSA Administrators. IIRC, popular around here.

 

[travelover]

I use HSA Administrators to invest in Vanguard funds in my HSA. So far so good.

 

[pb4uski]

I use HSA Administrators to invest in Vanguard funds in my HSA. So far so good.

+1 Their fees are annoying but not a big deal in the whole scheme of things.

 

[RunningBum]

Another thread linked an article evaluating HSA's for people who are using them as investments. Best HSA Provider for Investing HSA Money with an update Elfcu HSA Still The Best Despite New Wire Transfer Fee . It says that Eli Lilly FCU is the lowest cost, though if you want to keep in one fund, Saturna Capital can be even lower. HSA Bank is another option.

Fees vary a bit depending on your balance for some and # of transactions or transfers to the investment account for others, but for me I was looking at:

• ~$100 for HSA Administrators
• $66 for HSA Bank or tie up $5000 in a 0.3% account
• $24 for EL FCU plus $36 or tie up $2500 in a 1% account, plus a one-time $5 fee/donation to join the CU
• $15 for Saturna Brokerage HSA per trade

Investing in VG funds looks to be an option for all. In fact, HSA Administrators looked to be the most restrictive as they only allowed a subset. The others go through TD Ameritrade so any fund or stock would appear to be available.

I haven't yet done full due diligence to verify there are no other costs or limitations, or any extraordinary fees to eventually get your money out. I am going to wait until January when I make my contribution and then move out of my no cost 1.5% credit union account.

 

[pjm-7]

I've looked at a few of these firms for HSA's. Since all I can do for my HSA is to do the one-time rollover of $4350 from my IRA, I've decided to use my local credit union. Yes, the interest is minimal, but no fees. I figure that I will probably use up this cash in the next five years or so. Wanting to handle a $4000 investment account is not a good use of my time.

 

[mpeirce]

I use the default HSA provider for my Anthem/BCBS insurance. It's BenefitWallet and they offer a couple of Vanguard funds (plenty of others as well). There are fees (all HSA have higher than I'd think is normal fees, but since they all have these fees, there isn't much you can do about it).

They make me keep $1500 in the "checking account" and I keep the rest in VTSMX (Total Stockmarket).

If/when you need to use the funds for medical spending they offer a debit card.

These are their fees/rates:

APY on checking: 0.15%
Monthly service charge: $2.95
Paper statement per month: $1.25
2nd Debit card (1st is free): $5.00
2nd Checkbook (1st is free): $10.00)

Nothing too bad really.

 

[Sue J]

I've been happy with HSA Administrators.

As for the Vanguard funds being just a subset, for me the choices were broad enough at 22 funds. Many of these are available in the HSA as Admiral funds with small amounts invested which is nice for those of us who don't have Admiral level funds available for investing outside of the HSA.

 

[RunningBum]

Good point on the Admiral funds with HSA Administrators. I'll have to remember to factor that in to the fee costs when I make my decision next year.

 

[Gotadimple]

I use the default HSA provider for my Anthem/BCBS insurance. It's BenefitWallet

These are their fees/rates:

APY on checking: 0.15%
Monthly service charge: $2.95
Paper statement per month: $1.25
2nd Debit card (1st is free): $5.00
2nd Checkbook (1st is free): $10.00)

Nothing too bad really.

The monthly service charge would be a concern to me. HSA Bank requires a higher minimum ($5,000 and pays .20%), but then there is no monthly service charge.

Do you have an option to avoid a service charge? It looks like the monthly service charge more than eats up what you can earn on the checking account. You need to give them about $35 year in service charges, and they give you $2.40 in interest. Are you making up the costs in your investments?

-- Rita

 

[zinger1457]

I use Wells Fargo HSA, they wave the monthly service fees as long as your account balance (savings and/or investment funds) is over $5k. They don't offer Vanguard funds but the funds they do offer are adequate for my needs.

 

[Accidental Retiree]

I've been happy with HSA Administrators.

As for the Vanguard funds being just a subset, for me the choices were broad enough at 22 funds. Many of these are available in the HSA as Admiral funds with small amounts invested which is nice for those of us who don't have Admiral level funds available for investing outside of the HSA.

+1

 

[mpeirce]

Do you have an option to avoid a service charge? It looks like the monthly service charge more than eats up what you can earn on the checking account. You need to give them about $35 year in service charges, and they give you $2.40 in interest. Are you making up the costs in your investments?

Yes. We have over $25K in the Vanguard Total Stock Market fund. So the $35 service charge is pretty much round off error.

The convenience of having it linked into my health insurance provider site it worth a few dollars. Eventually I may roll it over somewhere else, especially if I'm forced out of an HSA compliant insurance plan.

 

[teejayevans]

I use Wells Fargo HSA, they wave the monthly service fees as long as your account balance (savings and/or investment funds) is over $5k. They don't offer Vanguard funds but the funds they do offer are adequate for my needs.

I thought investment funds didn't count towards $5k?


Sent from my iPad using Early Retirement Forum

 

[zinger1457]

I thought investment funds didn't count towards $5k?

I keep $2K of my HSA account in the cash balance account, the remainder (including new deposits) are in investment funds, no monthly service fee.

From Wells Fargo:

HSA monthly service fee $4.25
Fee will be waived if the combined deposit and investment balance in the HSA on the last business day of the month is
greater than or equal to $5,000.

 

[NoMoreJob]

I use HSA Bank. Maintaining a $5,000 in the HSA account plus opting for e-statements etc. avoids all fees and earns .2% interest. All additional funds may be invested in Vanguard funds or ETFs through a linked account at TD Ameritrade with no associated fees. It's a bit convoluted but workable and all fees are avoided.

 

[RunningBum]

I use HSA Bank. Maintaining a $5,000 in the HSA account plus opting for e-statements etc. avoids all fees and earns .2% interest. All additional funds may be invested in Vanguard funds or ETFs through a linked account at TD Ameritrade with no associated fees. It's a bit convoluted but workable and all fees are avoided.

Is there a trading fee at Ameritrade each time you buy a fund or ETF?

 

[NoMoreJob]

Is there a trading fee at Ameritrade each time you buy a fund or ETF?

I only do this once per year so don't recall all the details but TD offers many commission free ETFs which includes Vanguard index ETFs. These are what I'm interested in so I pay no fees to TD (or to HSA Bank by keeping a minimum balance).

 

[sheehs1]

This is the first year I used an HSA and "just recently set it up". Feeling like I had to do something quickly to get the tax credit for 2014, I went to my local regional bank. At the point in time, the funds in it become what I consider, investable, I might transfer. The bank waived the monthly service fee since I was transferring from a non service fee account into this and due to "the other account relationships".
I plan to use the money in it for next year's health care expenses (I think). So investing didn't seem a priority at the time. But if I decide to accumulate for later years,I will transfer for investment purposes.

 

[NoMoreJob]

This is the first year I used an HSA and "just recently set it up". Feeling like I had to do something quickly to get the tax credit for 2014, I went to my local regional bank. At the point in time, the funds in it become what I consider, investable, I might transfer. The bank waived the monthly service fee since I was transferring from a non service fee account into this and due to "the other account relationships".
I plan to use the money in it for next year's health care expenses (I think). So investing didn't seem a priority at the time. But if I decide to accumulate for later years,I will transfer for investment purposes.

An HSA can be a great way to save tax free if you don't need the money right away, especially given that you can accumulate health care receipts and reimburse yourself at a later time (providing you don't claim them on your tax return). There are no other savings vehicles I'm aware of that allow tax free contributions, growth and withdrawals (when spent for medical expenses). They're a boon for early retirees.

 

[explanade]

For people using HSA Administrators, how did you set up your accounts?

It appears like I have to register an account for the Vanguard funds part of the site at hsaadministrators.com.

Then set up a Internet bank account at hsabank.com?

Then you fund the debit card/checking account with an ACH transfer or mail in a check, then transfer those funds somehow to the Vanguard side so that the proceeds are used to buy the VG funds you designated in the percentages you designated?

But the hsaadministrators.com account is showing a $45 annual administrators fee to be paid by PayPal while it seems there are a variety of fees, like ATM fees, fees for getting a check mailed to you. You can avoid some of these fees by setting up direct deposit it appears.

But is the mechanics right, you fund the Internet bank account and that account will be used to fund the purchase of the funds?

When you redeem any of the funds for expenses, the proceeds go to the bank account and then that would somehow transfer to your institution unless you used the debit card?

 

[easysurfer]

I set up my account with HSA Administrators back in 2008, before HSA Bank came into the picture. When I set it up, that was a transfer from the HSA account I had at megacorp.

At HSA Administrators, I only care about investing in the Vanguard funds. So, the only time I use HSA Bank is to get the tax document online for filing my taxes.

For deposits, I go the old fashioned route of writing a check each month and sending that in with a printed contribution form. For January, I added the $45 admin fee to the check as there is a line for the fee on the contribution form.

For reimbursments, my account is set up for direct deposit to my checking account and I like to redeem my qualified expenses instead of accumulating them. I do that online at HSA by just specifying the reimbursement amount.

My method is just one way. For me, less is more manageable, which I don't mind.

I don't have a debit card for my HSA.

 

[audreyh1]

For people using HSA Administrators, how did you set up your accounts?

It appears like I have to register an account for the Vanguard funds part of the site at hsaadministrators.com.

Then set up a Internet bank account at hsabank.com?

Then you fund the debit card/checking account with an ACH transfer or mail in a check, then transfer those funds somehow to the Vanguard side so that the proceeds are used to buy the VG funds you designated in the percentages you designated?

But the hsaadministrators.com account is showing a $45 annual administrators fee to be paid by PayPal while it seems there are a variety of fees, like ATM fees, fees for getting a check mailed to you. You can avoid some of these fees by setting up direct deposit it appears.

But is the mechanics right, you fund the Internet bank account and that account will be used to fund the purchase of the funds?

When you redeem any of the funds for expenses, the proceeds go to the bank account and then that would somehow transfer to your institution unless you used the debit card?

HSA Administrators set up the HSA Bank account for me when we applied on-line last year.

Then I filled out an ACH deposit agreement and mailed it in. This let me direct funds to the account from my bank. I think on the HSA site I specified what % of any deposit goes to the debit card (i.e. HSA Bank) and what % goes to which Vanguard funds.

I think it's the opposite of what you are imagining.

 

[explanade]

I'm going to call in on Monday. After I enrolled, I didn't hear anything from them until I got 3 mailings from them about a week to two weeks later.

I guess I kind of expected it to be like a VG account, direct ACH transfers to buy funds and then transfer out any that I redeem. Maybe there would be some intermediary cash account to hold before and after purchases and redemptions but this setup seems unnecessarily complex.

 

[Sue J]

For people using HSA Administrators, how did you set up your accounts?

It appears like I have to register an account for the Vanguard funds part of the site at hsaadministrators.com.

Then set up a Internet bank account at hsabank.com?

Then you fund the debit card/checking account with an ACH transfer or mail in a check, then transfer those funds somehow to the Vanguard side so that the proceeds are used to buy the VG funds you designated in the percentages you designated?

But the hsaadministrators.com account is showing a $45 annual administrators fee to be paid by PayPal while it seems there are a variety of fees, like ATM fees, fees for getting a check mailed to you. You can avoid some of these fees by setting up direct deposit it appears.

But is the mechanics right, you fund the Internet bank account and that account will be used to fund the purchase of the funds?

When you redeem any of the funds for expenses, the proceeds go to the bank account and then that would somehow transfer to your institution unless you used the debit card?

I did mine last year and I opened the account at hsaadministrators.com and they did the set up including the HSA Bank account. I think I got info in the mail and with that info set up the online access and password etc. My first contribution was by paper check but after that I got all set up to do it all online with ACH transfers and direct deposits. I got an HSA bank debit card but we haven't used it.

To make a contribution you go to the HSABank site -
http://www.hsabank.com/medialibrary/InternetBanking_contribution_instructions

To manage the investments at Vanguard you go to the hsaadministrators.com site and you can exchange funds, reallocate your percentages or transfer to the debit card. This is where you also initiate a transfer to your own bank account to reimburse yourself for previous expenses that you paid.

It was all a little confusing at first, but after it was all set up I explored around the site and figured it out.

We keep all the finds in the Vanguard accounts and I initiate all the transfers there.

Last year the bill for the fee came in the mail, but they now have the payment info posted when you log on.

I avoided all the fees (except for the $45 annual fee) by doing all the activity online. The 0.0008 fee on the investment came to a total of $12.36 for the year and they deduct that from the investment accounts.