Reasonable HSA fee? cheaper options?

[Fermion]

Since we will be retiring this month, HR informed us that we are now responsible for our HSA fee ($3.95 per month at UMB bank).

We have about 20k there, treating it like a Roth (pay all our medical out of pocket).

So that is about 0.25% per year fee. Reasonable or is it possible to get cheaper?

 

[pb4uski]

It also depends on what the HSA is invested in... if it is in a bank account then after the 0.25% of fees it is probably not earning that much.

We transferred ours to HSA Administrators. We pay more in fees ($45 annual fee plus some others) but can invest in low cost Vanguard funds (ours is in Total Stock) so even though we pay high fees I think we will be better off in the long run than paying low fees but earning much less or being limited to investing in high-cost funds.

 

[Sue J]

Our fee for HSA Adminstrators is $45/yr plus .08% quarterly on investments so your fee sounds reasonable.

 

[RunningBum]

http://www.early-retirement.org/forums/f38/hsa-accounts-74837.html recent thread on HSA account options. It is possible to do it cheaper but yours isn't bad, depending on whether you have good investment choices.

 

[walkinwood]

I use HSA Administrators, but am very frustrated by their web site. It is SLOW and so very unintuitive.

 

[Nunthewiser]

I haven't done it yet, but I intend to open one with this credit union, which is available to anyone. I haven't found a catch or fee yet... Look halfway down the page for HSA rates...

https://www.connexuscu.org/rates/deposit-accounts

 

[pb4uski]

I use HSA Administrators, but am very frustrated by their web site. It is SLOW and so very unintuitive.

+1 Luckily, our HSA money just sits there in Vanguard funds (we no longer can do contributions) and grows so the only thing I have to do is log on periodically and get the periodic dividends and redemptions for the .08% fee. If I was actually using the HSA funds then I would move it elsewhere that had better online capabilities.

 

[Gotadimple]

Try HSA Bank. No fee if you maintain a minimum in the bank account, access to TD Ameritrade for investments (with a monthly fee). I don't invest but hold the funds to pay expenses.

Add up all the possible expenses, I don't think it will come to $45 per year. Currently paying .40% on savings.

Rita

 

[Cobra9777]

My HSA is at Fidelity. They waive the $48/yr fee for households with $250K in assets at Fidelity. So, I've never paid a fee beyond the ER of whatever ETF I own. It's a brokerage account, so I can own anything I want, although there is the usual $7.95 commission to trade non-Fidelity ETFs. I currently hold an iShares equity ETF, with no commission. It's also very convenient for contributions and distributions, which are just an online transfer to/from our Fidelity cash management account.

 

[audreyh1]

My HSA is at Fidelity. They waive the $48/yr fee for households with $250K in assets at Fidelity. So, I've never paid a fee beyond the ER of whatever ETF I own. It's a brokerage account, so I can own anything I want, although there is the usual $7.95 commission to trade non-Fidelity ETFs. I currently hold an iShares equity ETF, with no commission. It's also very convenient for contributions and distributions, which are just an online transfer to/from our Fidelity cash management account.

Fidelity HSAs are still not available to individuals AFAIK. You must have gotten yours through your company health insurance plan.

 

[Cobra9777]

Fidelity HSAs are still not available to individuals AFAIK. You must have gotten yours through your company health insurance plan.

You are correct. I just kept it from my Megacorp days. I didn't know they were unavailable to everyone.

 

[audreyh1]

if you have a large enough amount, and it looks like you do, you can probably roll it over somewhere that waives annual or monthly fees once minimums are met.

 

[SevenUp]

You are correct. I just kept it from my Megacorp days. I didn't know they were unavailable to everyone.

Not sure. Didn't have one while working. Called Fidelity as a MegaCorp retiree but they said I had to fill out an individual request because I was no longer an employee. Set one up for me, and spouse was also able to establish a Fidelity HSA by making an individual application (and never having worked for MegaCorp).

 

[explanade]

+1 Luckily, our HSA money just sits there in Vanguard funds (we no longer can do contributions) and grows so the only thing I have to do is log on periodically and get the periodic dividends and redemptions for the .08% fee. If I was actually using the HSA funds then I would move it elsewhere that had better online capabilities.

How do you get redemptions from HSA Administrators?

 

[MBSC]

Try HSA Bank. No fee if you maintain a minimum in the bank account, access to TD Ameritrade for investments (with a monthly fee). I don't invest but hold the funds to pay expenses.

Add up all the possible expenses, I don't think it will come to $45 per year. Currently paying .40% on savings. Rita

The HSA Bank interest rate depends on your balance in the bank account, currently .40% for the OP's $20k. If you link the account to TD Ameritrade, there is no monthly fee if you keep $5k at HSA Bank earning .20%, otherwise a total of $5.50 in monthly fees ($2.50 monthly account maintenance and $3.00 investment fee).

HSA Bank Rates and Fees

 

[easysurfer]

I use HSA Administrators, but am very frustrated by their web site. It is SLOW and so very unintuitive.

+1. What? You don't like their "new and improved" website?

 

[easysurfer]

How do you get redemptions from HSA Administrators?

I used to get my distributions (I reimburse myself each year, instead of letting the account grow) for qualified expenses the old fashioned way but sending in a form, US mail, each year.

But now, I've used their "Automatic Contribution & Distribution Authorization" form to give the bank info where you want the distributions deposited to. Then each year, I just specify (online at their site) the amount, and the distribution automatically gets placed in my account.

When you log on, go to their "Forms" tab to see the "Automatic Contribution & Distribution Authorization" form.

 

[explanade]

Besides the $45 fee it sounded like there was some .08 maintenance fee?

And pb4 seemed to be referring to a way to get redemptions on that fee?


As for distributions, can you have them automatically reinvest to additional shares?

 

[sengsational]

I went with "Elements Financial". It's free if you just want an interest bearing account, and a small fee for if you want a trading account. I only had one year's worth of HSA contributions, so didn't bother to get a trading account. Now that I have two years' worth, that's on the agenda.

I learned about it in this post. It used to be called "elfcu", but it's just a name change. Customer service has been great.

 

[523HRR]

Our HSA is with Optum Bank for over 5 years now. No fees with minimum cash balance. Remainder can be invested in a nice selection of mutual funds, including several low-cost Vanguard index funds. Very user friendly.

 

[diehard1997]

Our HSA is with Optum Bank for over 5 years now. No fees with minimum cash balance. Remainder can be invested in a nice selection of mutual funds, including several low-cost Vanguard index funds. Very user friendly.

+1

We've been with Optum for many years and have had great luck. The only negative is the account no longer automatically downloads transactions into Quicken.


Sent from my iPhone using Early Retirement Forum

 

[LOL!]

As noted, HSA Bank has no fees if you put $5000 there earning 0.2% and then the rest at TDAmeritrade invested in Vanguard index ETFs (no commissions if you sign up for that which you definitely should).

So if you can earn 1% on putting the $5,000 elsewhere, lets call the fees 0.8% of $5,000 annually or $40 a year. If you go below $5,000, then that's $5.50 a month or $66 a year added. I know some folks feel they will earn that $66 by investing at TDAmeritrade. For myself, I just leave $5,000 in the savings account and reduce $5,000 in any other cash account. Wait a minute, I don't keep cash around, so I cannot reduce another account by $5K.

HSABank has downgraded their computers, their servers, their web site, their phone service, and their people, so you may not want to use them if you need to make any transactions with them.

 

[Daniel J]

I just opened an account with Optum as well. Vanguard Admiral MFs are available. Fees are on the low side for an HSA.

 

[MooreBonds]

So if you can earn 1% on putting the $5,000 elsewhere, lets call the fees 0.8% of $5,000 annually or $40 a year. If you go below $5,000, then that's $5.50 a month or $66 a year added. I know some folks feel they will earn that $66 by investing at TDAmeritrade. For myself, I just leave $5,000 in the savings account and reduce $5,000 in any other cash account. Wait a minute, I don't keep cash around, so I cannot reduce another account by $5K.

HSABank has downgraded their computers, their servers, their web site, their phone service, and their people, so you may not want to use them if you need to make any transactions with them.

I've had an HSA at HSA Bank since the first year HSAs became available. While I did notice the changes over the past year, my only interaction with them is my annual contribution to my HSA Bank account (which I can do all on-line, with ACH debits from my checking account), and then transferring that money once it clears to my TD Ameritrade account.

I haven't had any problems or issues with them. Is their website perfect? Well, a little on the 'less than perfect' side at times...but, then again, Vanguard's website was MUCH more cumbersome for years (IMO), and V is a substantially bigger company. So you put up with some annoyances.

If I had to regularly withdraw money from HSA Bank, then there might be some different feelings if I found the process to be difficult....but that hasn't happened yet.

And I start each year off in January with only about $75 cash balance, with the remaining fully invested, since I can earn 6%+ on various investments (BDCs, preferreds) that more than pays for the extra fee for a sub-$5,000 balance.

 

[StikyBoots]

I have a HSA by Select Account. The fee is $1/mo and an additional $1.50/mo to invest any HSA funds over $1000 in a mediocre selection of funds through Schwab.

Also of interest to those keeping their HSA in cash, Select Account does not have FDIC insurance on the HSAs.

I might look into Fidelity for my own account to gain access to a wider selection of lower cost funds.