My DW has an HSA this year, which is a first for us. I was originally thinking that we'd save the max in the HSA every year and pay out of pocket for medical expenses, but in looking at her HSA, I'm not sure that's the best route. I'm curious to hear other opinions on what I'm thinking.
DW's HSA has terrible investment options. All actively managed funds, starting at an ER 0.57% and going up quite a bit from there. This is where her employer contributions go, for a total of $700/year.
It's my understanding that she can have multiple HSAs, so my thinking is that we'd open an HSA somewhere that offers Vanguard funds with low/no fees (need to investigate where). The way I understand an HSA is that a maximum of $3300 can be contributed for 2014, which also includes the $700 from the employer. This means that we can open a new HSA somewhere else and contribute $2600. Is that correct? Are there any issues with having multiple HSAs?
The second part is that I'm thinking of spending the $700/year from the employer for medical expenses. Originally I was thinking that we'd rollover this balance to a better HSA once DW leaves her employer, but since the options in the plan are so bad, I'm thinking it might be better to use the money for medical expenses. Is that a good idea?
The only negative that I can think of is that we can't contribute directly to her employer sponsored HSA to avoid payroll taxes. In looking at their website, I don't see a way to set this up, so it might not be an option anyways.
Any thoughts from others on this approach is appreciated. I want to make sure I'm not missing anything before I commit to another HSA and start spending the employer contributions.
Edit: I found the form to make payroll deductions, so yes, DW could contribute and avoid payroll taxes. But the options are still bad, so I don't think this helps avoiding another HSA.
DW's HSA has terrible investment options. All actively managed funds, starting at an ER 0.57% and going up quite a bit from there. This is where her employer contributions go, for a total of $700/year.
It's my understanding that she can have multiple HSAs, so my thinking is that we'd open an HSA somewhere that offers Vanguard funds with low/no fees (need to investigate where). The way I understand an HSA is that a maximum of $3300 can be contributed for 2014, which also includes the $700 from the employer. This means that we can open a new HSA somewhere else and contribute $2600. Is that correct? Are there any issues with having multiple HSAs?
The second part is that I'm thinking of spending the $700/year from the employer for medical expenses. Originally I was thinking that we'd rollover this balance to a better HSA once DW leaves her employer, but since the options in the plan are so bad, I'm thinking it might be better to use the money for medical expenses. Is that a good idea?
The only negative that I can think of is that we can't contribute directly to her employer sponsored HSA to avoid payroll taxes. In looking at their website, I don't see a way to set this up, so it might not be an option anyways.
Any thoughts from others on this approach is appreciated. I want to make sure I'm not missing anything before I commit to another HSA and start spending the employer contributions.
Edit: I found the form to make payroll deductions, so yes, DW could contribute and avoid payroll taxes. But the options are still bad, so I don't think this helps avoiding another HSA.
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