Opening HSA account question

[DMFA]

Andrew wrote:

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.

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You would only qualify for an HSA if it is a post-deductible HRA that only kicks in once you have satisfied the federal minimum deductible of $2,600/family, or that has other limitations to it as outlined in IRS Pub 969.

 

[Andrew]

Thanks. I do not qualify for HSA unfortunately.  However i don't understand why my employer forces me to have an HRA(" it comes together with HDHP"). I can not even resign from having one and they will not change it to post deductible.

Funny thing is that people in HR and my health insurance company looked like they had no idea what HSA is and why i am even asking for it. They even could not tell me if my HRA is limited or post deductible, sic! I had to research it on my own.

 

I guess i have to spend  2K on taxes each year for few years and stick with taxable.

[atxeng]

Lithium wrote:

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.

Click to expand...

I dunno, Saturna doesn't seem that great...

High Operating Expense mutual Funds if you use theirs ~1+%

kinda expensive every year if you want access to other mainstream funds

• $15 fee commission on trades (Stocks & Funds)


• $25 fee inactive acct (no trades w/in a year)


• $75 fee to withdraw funds


• $1 fee per event dividend reinvest

I currently have HealthEquity ($20k, previous employer) and Optum ($1000 empl. benefit, current employer) and HSA (long time ago employer, empty)

HealthEquity:

• no fees on accounts >$2500


• must keep $1000 in cash account (maybe $2k, but mine is ~$975 for some reason)


• $25 fee to close account


• access to a whole lotta funds, from AmCen, Fidelity, etc


• can access Vanguard and other super low-cost funds by selecting "Investors Choice" which means HealthEquity charges an additional 0.033% charged to cash account.


• can pay for robo-advisor service, 0.08%

Optum:

• must keep $2000 in cash account (or $500 cash balance & $2.50/mo investing fee)


• $3/mo account fee for cash accounts <$5000


• $20 fee anytime funds transfer out (however, NO fee to close an Optum account and just mail a check )


• worse mutual fund options than HealthEquity

HealthSavingAdministrators, partners w/ Vanguard:

• $10 withdrawal fee


• $25 rollover fee


• $25 account closing fee


• $45/yr administrative fee ($3.75/mo)


• access to tons of funds (link)

Both of these are oookkk, but not the best.  It just seems like every single HSA company nickels and dimes you....all I want is to invest my cash...I think HealthEquity seems the best, aside from having to keep $1000 in cash.

 

 

 

[atxeng]

atxeng wrote:

HealthEquity:

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Ooof, it looks like HealthEquity is charging a lot of fees on the low-cost funds.  Marking it up to a total of 0.4-0.56 OER. yikes

http://healthequity.com/investmentchanges/compare/

Maybe I should move over to Saturna?

[Jarpee]

Why are you transferring from health equity?

I will be eligible for an HSA for the first time this fall, seems like health equity and HSA bank are the two best/least amount of fees. Am I wrong?

[Lithium]

Health Equity is terrible.  I've been waiting for over three weeks for them to move my money over to Saturna, and it is really starting to irritate me.

If you are going to use the HSA as a Stealth IRA and just buy and hold the securities within, the fees at Saturna are unbeatable.  If you buy a mutual fund with automatic dividend reinvestment, all you pay is the $14.95 transaction fee every year.

Health Equity is killing me with fees.  Their wrap fee is a 0.4% AUM, and now that I am up to $16k in assets, that's an extra $65 I'm flushing down the toilet every year.  But the real problem is the $2,000 they require me to keep in cash that doesn't earn anything.

If you plan to use the HSA purely as a Stealth IRA and not for any short-term medical expenses, I'd avoid all the custodians that require you to tie any money up in cash.  I still think Saturna with the brokerage option is the best; it looks like HSA Bank and HealthSavingsAdministrators may be worthy competitors.

[DarrVao777]

Andrew wrote:

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.

Click to expand...

Sorry I don't have an answer regarding the eligibility of an HSA with an HRA / "Benny Card".

My only caution is regarding an unhelpful or incompetent HR. The HSA is definitely the right way to go in theory but an incompetent HR group can make it a very difficult thing to execute properly.

 

My own venture with an HSA:

- tried to lump sum contribute to the HSA, ended up getting $3300 / month taken out instead of $3300 / year (single at that time). Ended up making numerous long phone calls with HR to get the situation resolved.

- decided the small deduction wasn't worth the headache and found out it was an incredible PITA to close the account and actually get my money back from HSA Bank. Ended up making numerous long phone calls with HSA Bank to get the situation resolved.

 

My wife's venture with an HSA:

- she is OK with an equal amount being pulled from her biweekly paycheck to hit the max contribution limit of $6750 (family now). At least that part simplifies things a little bit and her HR group seems to be better equipped to handle simple HSA questions.

- ended up changing companies last year which meant changing HSA providers. Still dealing with the mess now of rolling over one HSA into the new one. (The new one is claiming they never received the money. The old one is claiming they sent the money out and it's no longer their problem. Fortunately it's a "small" account but $12000 is now missing)

- I told my wife it isn't worth me having to call both companies daily during my lunch break to get this nonsense sorted out.

 

I file this under a good idea in theory but we've had some tremendously terrible luck getting the execution right. I tend to be very high strung about talking to customer support agents in general so it had better be worth it to have to make this many customer support phone calls. IMO, the HSA / Stealth IRA just isn't worth it to me. The plastic surgeon in my group isn't the best person to go to for financial advice but I think he may have it right in this case: "Do 1 - 2 extra surgical cases per month and forget about squeezing every last drop out of the HSA"

[jfoxcpacfp]

Andrew wrote:

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.

Click to expand...

A Benny Card is not an account, just a prepaid debit card to allow you to access your account. It can be used for an HRA, HSA, or FSA.

[Kamban]

atxeng wrote:

$15 fee commission on trades (Stocks & Funds) $25 fee inactive acct (no trades w/in a year) $75 fee to withdraw funds $1 fee per event dividend reinvest

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If I understand correctly you spend $14.95 per year to invest in Vanguard funds and thus avoid inactivity fee. But I am confused about the withdrawal fee. What happens if 10 years later you want to withdraw some for pay for health related expenses. Do they charge $75 each time to sell the Vanguard funds and send you the check?

[TheGipper]

These posts are going to be a lot more common if ACA replace bill allows HSAs for everyone. I see a WCI updated HSA post coming......

Leaked WH draft version of bill looks like it just increases HSA contribution limits and flexibility but not decoupling with a HDHP which is a shame for those stuck with employers who won't offer an HSA-eligible health plan.

[AK2TX]

Hey everyone,

Couple quick questions. My wife and I are young and I am about to start residency. We have a HDHP and I just started an HSA at Alliant last week. I am less interested in the investing aspect of HSAs at this time and more interested in general knowledge about the account. Before I dump $6,750 into the savings I want to double check some things.

1. We have already spent $4,559 on health care this year, am I able to deposit that $6750 into the account and retrospectively write myself a check for previous purchases?


2. I will be starting residency in June will have better insurance at that time (prob not a HDHP)... Will that make my HSA obsolete then...


3. Am I able to withdrawal money out of the HSA at that time? My thoughts on this question would be "not without paying taxes on it!"

Thanks so much WCIHeads!

[atxeng]

AK2TX wrote:

Hey everyone,

Couple quick questions. My wife and I are young and I am about to start residency. We have a HDHP and I just started an HSA at Alliant last week. I am less interested in the investing aspect of HSAs at this time and more interested in general knowledge about the account. Before I dump $6,750 into the savings I want to double check some things.

1. We have already spent $4,559 on health care this year, am I able to deposit that $6750 into the account and retrospectively write myself a check for previous purchases?


2. I will be starting residency in June will have better insurance at that time (prob not a HDHP)… Will that make my HSA obsolete then…


3. Am I able to withdrawal money out of the HSA at that time? My thoughts on this question would be “not without paying taxes on it!”

Thanks so much WCIHeads!

Click to expand...

the HSA can work a lot like an IRA.  Pre-tax $$ put into an account, grows tax free (if invested), can be used as an expense account for medical expenses at any time, and can be used as regular retirement income w/o penalty after retirement age.

 

• The annual limit is total amount (your $$ + your employer's contribution).


• You can write yourself a check out of your HSA at any time for anything....technically though, if the IRS ever came sniffing around, you would need to demonstrate that those funds were used to pay/reimburse qualified medical expenses.


• if you start an HDHP and fund and HSA, and then change plans later, your HSA is still yours, it still exists, it still is there.  You just can't fund it for that year if you don't have an HDHP to go with it.  For example, I had an HSA for the last 4 years.  I changed employers in June 2016 and signed up for a PPO plan (wife was having a baby soon).  I was only able to fund my 2016 HSA for the amount of time I had it (6/12 months * Annual limit).  There is IRS rules for this you can google.  For 2017, I went back to an HDHP plan and continued to fund my HSA.


• The tricky part I see is that HSA's are a lot more difficult to deal with and move around than IRA's, but are still pretty much the same thing.  Your employer's HDHP plan usually partners with a specific bank to run the HSA.  That doesn't mean you have to use them or transfer over all your accounts from previous HSA.  It's just that your employer's HR worked out a deal with a specific administrator.


• Pro tip:  generally, if you can afford it, you want to pay for your medical expenses out of pocket (maybe with your rewards credit card? yea?) and just keep records of the bill and DO NOT reimburse yourself from the HSA.  Let your HSA $$ stay and grow and just keep a running tally of your already paid for medical expenses.  At any time, you can reimburse yourself from your HSA...so just let it stay and grow for the next 30 years and think of your list of medical receipts as a rainy day fund.  At any time, you can write a check from your HSA.

 

[Jarpee]

I didn't realize Alliant had an HSA option, so they charge 65 basis points. Any fees to invest if you have over 1k? Just wondering how it compares to the others.

[jfoxcpacfp]

AK2TX wrote:

Hey everyone,

Couple quick questions. My wife and I are young and I am about to start residency. We have a HDHP and I just started an HSA at Alliant last week. I am less interested in the investing aspect of HSAs at this time and more interested in general knowledge about the account. Before I dump $6,750 into the savings I want to double check some things.

1. We have already spent $4,559 on health care this year, am I able to deposit that $6750 into the account and retrospectively write myself a check for previous purchases?


2. I will be starting residency in June will have better insurance at that time (prob not a HDHP)… Will that make my HSA obsolete then…


3. Am I able to withdrawal money out of the HSA at that time? My thoughts on this question would be “not without paying taxes on it!”

Thanks so much WCIHeads!

Click to expand...

1. As long as you had your HDHP in place when you made the $4,559 of health care expenditures, you can run the $$ through your HSA. BUT see next answer.


2. You will owe taxes if you fund your HSA for a full year and you don't qualify for a full year. Won't go into the rules here, but you need to do a little research, we've discussed in the forum. I guess I should ask, though - when did you begin using the HDH plan?


3. I think this question is probably irrelevant given your June plans.

[jfoxcpacfp]

(removing duplicate answer)