Opening HSA account question

[Andrew]

Figured out that HSA would be great stealth IRA option for me, prior to putting rest of my retirement money into taxable account.

Me and my wife are both employed physicians.

Can we still open HSA and and make contribution for 2016??

I was thinking about HSA Bank.

[Atlrock]

You can make contributions for 2016 up until tax day 2017.  I personally use SelectAccount.com ...... they allow self directed brokerage account at Schwab for an extremely low fee.

[spiritrider]

This is assuming one or both of you have a qualified HDHP and no disqualifying "other coverage" such as a spouse's general purpose FSA.

[Andrew]

Thank you for  advise. We both have HDHP and we do not have FSA.

[Lithium]

Saturna and SelectAccount are two of the best.  HSA Bank has excessive fees.

[jfoxcpacfp]

Edited to remove duplicate post.

[jfoxcpacfp]

Andrew wrote:

Figured out that HSA would be great stealth IRA option for me, prior to putting rest of my retirement money into taxable account.

Me and my wife are both employed physicians.

Can we still open HSA and and make contribution for 2016??

I was thinking about HSA Bank.

Click to expand...

As long as you had HDHP in place in 2016, you can fund an HSA for 2016. You can compare options here. I like Optum but there are plenty of good custodians.

[The White Coat Investor]

Lithium wrote:

Saturna and SelectAccount are two of the best.  HSA Bank has excessive fees.

Click to expand...

What? HSA Bank is fee-free if you keep $5K in there. If you invest that $5K, it's $66 a year. But you can invest in Vanguard ETFs commission free through TD Ameritrade with 0.05% ERs. What do you invest in at Saturna? A bunch of 1%+ ER funds.

http://www.saturna.com/performance/fees.shtml

Select Account has fees too (weird I know):

https://mnscsc.org/scsc/media/insurance/docs/hsa-fee-rate-schedule16.pdf

You can use their freesaver account (fee free) but it pays you 0% interest. You can't invest at all until you have $10K in there and even then, there is an $18 a year fee. I don't know what their brokerage option is, but even if it is just as good as the TD Ameritrade option, you're still coming out behind.

I'm not seeing real competition for HSA Bank there on fees. Now if you want to argue service is better or something...

[Lithium]

The White Coat Investor wrote:

Lithium wrote:

Saturna and SelectAccount are two of the best.  HSA Bank has excessive fees.

Click to expand…

What? HSA Bank is fee-free if you keep $5K in there. If you invest that $5K, it’s $66 a year. But you can invest in Vanguard ETFs commission free through TD Ameritrade with 0.05% ERs. What do you invest in at Saturna? A bunch of 1%+ ER funds.

http://www.saturna.com/performance/fees.shtml

Select Account has fees too (weird I know):

https://mnscsc.org/scsc/media/insurance/docs/hsa-fee-rate-schedule16.pdf

You can use their freesaver account (fee free) but it pays you 0% interest. You can’t invest at all until you have $10K in there and even then, there is an $18 a year fee. I don’t know what their brokerage option is, but even if it is just as good as the TD Ameritrade option, you’re still coming out behind.

I’m not seeing real competition for HSA Bank there on fees. Now if you want to argue service is better or something…

Click to expand...

See the Finance Buff's review:

https://thefinancebuff.com/hsa-transfer-to-saturna-brokerage-services.html

There is also a long thread on Bogleheads about this.  They have a self-directed brokerage in addition to the expensive NTF funds.  In summary, at Saturna, I can invest in a mutual fund with a 0.05% expense ratio for $14.95 a year (if you only make one trade a year) rather than $66 a year at HSA bank.  If you want to invest in Vanguard funds, it's $10 extra.  Still way cheaper, and you don't have to keep any money on the sidelines in cash.

As for service, I am in the process of transferring over from Health Equity.  So far they have been pretty helpful, answering all my questions very expeditiously.  Most of the customers at Bogleheads are similarly satisfied.  I can provide updates on how the whole process works out.

I'll admit I was mistaken on SelectAccount, they have higher fees than I realized.

[Atlrock]

I have a SelectAccount HSA.  You are required to leave a $1000 balance held at SelectAccount.  The remaining balance is in a Self-directed brokerage account held at Schwab.  Yes... there is an $18 fee.

[Lithium]

The problem with Select Account isn't the $18 a year fee (I thought the fee schedule above shows there is an "Employee Participant Account Fee," is this not extra?), but the opportunity cost of leaving $1,000 uninvested.  If that earns a 5% return, you're giving up another $50.

With my current HSA I am paying a wrap fee of 0.4% on $16k, in addition to leaving $2,000 in cash earning squat.  So this switch is going to save me about $150 in fees and opportunity cost.

[retinadoc]

$25 vs $66? None of these fees are game-changing. I use HSA Bank, it's fine.

We probably should be shopping HSA providers on quality of service mostly, but that's difficult -- you roll the dice and go with one, then too much trouble (for me!) to switch.

[Atlrock]

I am totally aware of the potential $50 opportunity cost associated with the SelectAccount balance.  But on a $100,000 plus balance ..... the $50 is well worth the extremely broad investment options and housing all my accounts in one place.  To each his own.

[The White Coat Investor]

Lithium wrote:

The White Coat Investor wrote:

Lithium wrote:

Saturna and SelectAccount are two of the best.  HSA Bank has excessive fees.

Click to expand…

What? HSA Bank is fee-free if you keep $5K in there. If you invest that $5K, it’s $66 a year. But you can invest in Vanguard ETFs commission free through TD Ameritrade with 0.05% ERs. What do you invest in at Saturna? A bunch of 1%+ ER funds.

http://www.saturna.com/performance/fees.shtml

Select Account has fees too (weird I know):

https://mnscsc.org/scsc/media/insurance/docs/hsa-fee-rate-schedule16.pdf

You can use their freesaver account (fee free) but it pays you 0% interest. You can’t invest at all until you have $10K in there and even then, there is an $18 a year fee. I don’t know what their brokerage option is, but even if it is just as good as the TD Ameritrade option, you’re still coming out behind.

I’m not seeing real competition for HSA Bank there on fees. Now if you want to argue service is better or something…

Click to expand…

See the Finance Buff’s review:

https://thefinancebuff.com/hsa-transfer-to-saturna-brokerage-services.html

There is also a long thread on Bogleheads about this.  They have a self-directed brokerage in addition to the expensive NTF funds.  In summary, at Saturna, I can invest in a mutual fund with a 0.05% expense ratio for $14.95 a year (if you only make one trade a year) rather than $66 a year at HSA bank.  If you want to invest in Vanguard funds, it’s $10 extra.  Still way cheaper, and you don’t have to keep any money on the sidelines in cash.

As for service, I am in the process of transferring over from Health Equity.  So far they have been pretty helpful, answering all my questions very expeditiously.  Most of the customers at Bogleheads are similarly satisfied.  I can provide updates on how the whole process works out.

I’ll admit I was mistaken on SelectAccount, they have higher fees than I realized.

Click to expand...

That doesn't sound too bad if you use the brokerage option. I can see how you could come out $51 per year ahead doing that. I'm still not sure that deserves the phrase "excessive fees." How about "Done right, Saturna has slightly lower fees than HSA Bank."

[Andrew]

I found out that I had " Benny Card" provided by my employer last year. I guess it is some type of HRA. Does it mean I do not qualify for HSA for 2016?

Since I have switch our policy owner to myself ( my wife was an owner for 2016, we both work for the same employer) I  was again provided with Benny card for 2017. I did need even asked for it( card not activated yet- not sure if it means that HRA is not activated).

How can i get rid of it in order to be able to open my own HSA. My HR does not seem to be helpful at all.