Fidelity HSA Transfers takes 20 days?

[ken830]

Anyone done a transfer recently?

I have an HSA with a previous employer at Health Equity. I finally got tired enough of the monthly $10 "investment admin fee" and $4 "HSA admin fee" and started the transfer to Fidelity just today. Seems like it's all done online and automated these days, but the estimated completion of transfer is July 26, which is 20 calendar days from now. Does it really take THAT long?

One other thing that isn't clear: will I need to sell all of my investments in the investment portion of the account before transfer or is that done automatically? There are bits of wording that warn that my other provider may sell all investments, but there's some other bits where they say all "cash" will be transferred. Fidelity is closed now, but I guess I will call them in the morning. Just wondering if anyone has done this recently.

 

[audreyh1]

Mine took 4 weeks back in 2018? I think it’s usually because the other company is not very responsive, dragging their feet. Yes, it a real pain. In my case the company was HSA Administrators and everyone doing a direct transfer to Fidelity experienced the same hassle. I think I ended up having to call them at Fidelity’s suggestion. They said the transfer was imminent when I called.

So yes, these kind of transfers can take that long. It’s not like an ACH.

 

[ken830]

Thank you. I guess I will keep my expectations low and prepare to have fees deducted for at least another month during this transfer.

 

[audreyh1]

The Fidelity HSA is really wonderful and no fees at all. You’ll be so glad to get away from those monthly admin fees.

 

[SecondCor521]

As for your other question, Fidelity should be able to transfer the assets in-kind without selling them. Normally this wouldn't matter because HSAs are a tax deferred account, but you might live in California where, as you know, HSAs don't get that treatment at the state level.

If you do live in California, I would ask Fidelity to try to transfer in kind in order to avoid any capital gains taxes you might owe at the state level due to the transition in HSA custodian.

 

[xlf11]

I was told by Optum Bank that they will only transfer in cash (to get out of the MF over $100k), so I still hesitate to transfer to Fidelity due to out of market for such a long time.

 

[ken830]

As for your other question, Fidelity should be able to transfer the assets in-kind without selling them. Normally this wouldn't matter because HSAs are a tax deferred account, but you might live in California where, as you know, HSAs don't get that treatment at the state level.

If you do live in California, I would ask Fidelity to try to transfer in kind in order to avoid any capital gains taxes you might owe at the state level due to the transition in HSA custodian.

I was told by Optum Bank that they will only transfer in cash (to get out of the MF over $100k), so I still hesitate to transfer to Fidelity due to out of market for such a long time.

I DO live in California... Hopefully they can transfer in kind. I have about $50k in gains and our taxable income is high enough as it is.

 

[JoeWras]

I did it in early 2019. It took 4 weeks.

I can't remember who required it, but I had to liquidate to cash in Health Equity. My H.E. funds were weird funds that were proprietary, so perhaps that forced it.

Finally, H.E. charged a going away fee.

So much happier at Fidelity.

 

[ken830]

I did it in early 2019. It took 4 weeks.

I can't remember who required it, but I had to liquidate to cash in Health Equity. My H.E. funds were weird funds that were proprietary, so perhaps that forced it.

Finally, H.E. charged a going away fee.

So much happier at Fidelity.

I hope it doesn't come down to it, but if it does, I guess I may bite the tax "bullet" just to get away from Health Equity...

 

[JoeWras]

I hope it doesn't come down to it, but if it does, I guess I may bite the tax "bullet" just to get away from Health Equity...

Yeah, too bad certain states tax this. My state doesn't so it was a non-event.

 

[ken830]

I just have two Vanguard funds.

Fidelity call center just opened (8:30am EDT is only 5:30am PDT, so I'm still up anyway) and the rep told me that I need to check with Health Equity, but he press 99% sure that Health Equity will require liquidation and won't do in-kind transfers (because they have a 3rd part handle the investments or something??). I hung-up and called Health Equity and the rep confirmed that all transfers need to be liquidated first. I will need to think about this.... Maybe need to wait for a lower-income year to do the transfer... Not sure.. Health Equity fees really suck though.

 

[JoeWras]

Their liquidation requirement is just another reason to be frustrated with H.E.

 

[easysurfer]

Made me look back at when I did my transfer from Health Equity to Fidelity. Took about about 2 weeks. I did the "push from Health Equity" method after seeing youtube videos about how to faster get the ball rolling.

There's still about $3 left in the Health Equity account. I guess they don't fully close out and are hoping I'd come back one day. Not going to happen. When I said "I'm gone", I said ... .

P.S. I was in HSA Administrators but they quit and I figured switching from Healthy Equity was even less taking less poison than trying to switch from HSA Admin.

 

[gauss]

Anyone done a transfer recently?

I have an HSA with a previous employer at Health Equity. I finally got tired enough of the monthly $10 "investment admin fee" and $4 "HSA admin fee" and started the transfer to Fidelity just today. Seems like it's all done online and automated these days, but the estimated completion of transfer is July 26, which is 20 calendar days from now. Does it really take THAT long?

One other thing that isn't clear: will I need to sell all of my investments in the investment portion of the account before transfer or is that done automatically? There are bits of wording that warn that my other provider may sell all investments, but there's some other bits where they say all "cash" will be transferred. Fidelity is closed now, but I guess I will call them in the morning. Just wondering if anyone has done this recently.

OH Boy! This is a bit of a hot button for me.

Years ago I did a direct-transfer of an employer sponsored HSA to a 3rd party. It took months.

Never again did I do a direct transfer. I always used 60-day rollover/ aka indirect transfers where you just withdrawal the funds from the original trustee and deposit the funds with the new trustee -- being sure to have the new trustee code it as a 60-day / indirect rollover.

Note that some retirement account transfers (ie inherited IRAs) may not allow for direct transfers so proceed with caution if you have not done indirect / 60-day transfer/rollovers in the past.

Also be warned that, in general, there is a limit of home many indirect/60-day rollovers that you can do per year -- at least for IRAs.

-gauss

 

[snappytom]

I did the exact Health Equity HSA to Fidelity transfer 6 months ago.

HE only transfers cash so you will need to sell your positions before starting the process.
If I recall correctly HE sends a physical check to Fidelity, it took about 3 weeks to complete.

Much happier at Fidelity now.

 

[ccjarider]

I did the exact Health Equity HSA to Fidelity transfer 6 months ago.

HE only transfers cash so you will need to sell your positions before starting the process.
If I recall correctly HE sends a physical check to Fidelity, it took about 3 weeks to complete.

Much happier at Fidelity now.

HE transfer to Fidelity IS a slow process. Entirely due to HE wanting to hold your $ as long as legally possible.
Also HE may charge you $25 to close acct. Be sure to discuss HE fee with Fidelity as they will reimburse this fee. They did for me but I had to request.

 

[HenryD]

Optum would only allow me to move 90% of the balance initially, required liquidation, then charged me an account closure fee on the remaining 10%. It took about 60 days from beginning to end because I couldn't start the second transfer until the first was complete. Horrible experience entirely caused by Optum. Much happier at Fido.

 

[xlf11]

Optum would only allow me to move 90% of the balance initially, required liquidation, then charged me an account closure fee on the remaining 10%. It took about 60 days from beginning to end because I couldn't start the second transfer until the first was complete. Horrible experience entirely caused by Optum. Much happier at Fido.

Thanks for the real experience. Did you liquidate to cash first or OB liquidated your investment before initiating the transfer from Fido side?

 

[G-Man]

The Fidelity HSA is really wonderful and no fees at all. You’ll be so glad to get away from those monthly admin fees.

I agree. Recently transferred from HSA Bank to Fidelity. Investing your HSA dollars in Fidelity is so much easier.

 

[ken830]

Thank you everyone for your insight and for sharing your experience. It sure sounds nice over in Fidelity HSA land... I guess I need to decide if I want to take the state tax hit now (~$50k in capital gains, taxed at California's 9.3%) or kick the can down the road and keep paying Health Equity $14/month in fees (assuming they don't raise it).

I guess unless California changes tax rules to treat HSAs favorably or we move out of state, these are taxes I would have to pay eventually. And moving down 2 tax brackets doesn't seem remotely possible in the near-to-medium term... With hindsight, I should've done this 6 months ago when my gains were quite a bit more modest.

 

[Mulligan]

I agree. Recently transferred from HSA Bank to Fidelity. Investing your HSA dollars in Fidelity is so much easier.

I largely forgot I had HSA Bank, as basically all the HSA money is invested in TD (soon to be Schwab) and that account is linked to my other TD accounts. I guess a transfer is out of the question for me to save on fees as I have to many bonds and CDs, that I couldnt liquidate without getting ripped off selling from the bond desk. Oh well the fees arent too bad.

 

[SecondCor521]

Thank you everyone for your insight and for sharing your experience. It sure sounds nice over in Fidelity HSA land... I guess I need to decide if I want to take the state tax hit now (~$50k in capital gains, taxed at California's 9.3%) or kick the can down the road and keep paying Health Equity $14/month in fees (assuming they don't raise it).

$50K * 9.3% = $4650 in taxes or $14 a month in fees.

4650 / 14 = 332 / 12 = 27 years.

 

[ken830]

$50K * 9.3% = $4650 in taxes or $14 a month in fees.

4650 / 14 = 332 / 12 = 27 years.

Yeah...

Thing is the $10/mo investment admin fee is unavoidable if I don't want my money to be sitting as just cash. The $4 HSA admin fee, however, is avoidable if I have more than $2,500 of just cash. I had more than than, but the $10/mo fees ate into it and now it's $14/mo. I guess I can liquidate a small amount every few years to stay above the $2,500 limit to keep the fee down to $10/mo.

When I was employed at my previous employer, my salary deductions would keep the $2500 topped-off with each paycheck.

I think for now, this is what I will do.

 

[HenryD]

Thanks for the real experience. Did you liquidate to cash first or OB liquidated your investment before initiating the transfer from Fido side?

IIRC Optum said they could transfer in-kind, then rejected it when Fido asked. I liquidated after that, so maybe it took even longer than I remember.

 

[Alex The Great]

I was told by Optum Bank that they will only transfer in cash (to get out of the MF over $100k), so I still hesitate to transfer to Fidelity due to out of market for such a long time.

Do you mean they still transfer electronically but sell your MF before that? Or they send you a check at home address? I also have HSA with my current employer at Optum Bank and hope to get rid of it as soon as possible. It is all in cash.
I guess you wanted to initiate a transfer after the retirement, correct? Do you know if it is possible to make transfer while still employed? But the plan is to quit during the year and no company's match is expected?