Author Topic: Best HSA Custodian? 2017  (Read 6438 times)

live4soccer7

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Best HSA Custodian? 2017
« on: March 04, 2017, 12:22:16 AM »
I have an HSA plan this year and want to utilize this for many reasons. I want to simply contribute to it each year and invest it. I do not plan to withdraw anything from it unless there was an absolute emergency that required it, but I don't foresee that happening (do we ever though??). I should be able to cover any medical expenses out of pocket and save the receipts for later.

I'm looking at the lowest cost custodian to invest in index/mutual funds. I'd rather not have to keep money in the HSA at the bank, but rather have it all invested. From what I've seen this usually incurs a fee. I'll likely invest in one fund and just keep adding to that one fund each year when I contribute.

I should be able to include this in a payroll withdrawal/deduction at the end of the year as I have an S-Corp structure.


Let me know what you guys think. Thanks for any assistance!

Indexer

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Re: Best HSA Custodian? 2017
« Reply #1 on: March 04, 2017, 06:52:48 AM »
These are the two low cost plans I know of, both have Vanguard funds.

https://healthsavings.com/

http://healthequity.com/

I prefer health equity, but research both to see if you come to the same conclusion.

protostache

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Re: Best HSA Custodian? 2017
« Reply #2 on: March 04, 2017, 09:30:59 AM »
I picked SelectAccount for our HSA this year. Their ThriftSaver plan is free once we get to $2,500. I think the investment account is $18/year, but you have to keep $1,000 in the bank account portion. Their fund list includes several Vanguard institutional funds. Once you hit $10,000 you can open a self-directed Schwab account which lets you invest in Schwab mutual funds and ETFs for free and has $6.95 trades for everything else.

live4soccer7

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Re: Best HSA Custodian? 2017
« Reply #3 on: March 04, 2017, 01:20:10 PM »
Here is some of the information I've found:

HSA Bank - no money in their account/all in investments
$66/year total
This is from a 2.50 monthly account maintenance and a 3.00 Investment fee each month
http://www.hsabank.com/~/media/files/fees_s1

Health Savings[/b] - no money in their account/all in investments [UPDATE]
$45 Flat Fee/year and they charge 6.25 basis points per quarter (i.e., $0.625 per $1,000 every three months). This equates to .25%/year
While cheaper to get started, after a few years they quickly become more expensive if you are maxing out your HSA and leaving it there. Here is how I came to that conclusion.

x=amount in account, $21 is the amount more HSA Bank costs. I was curious.
(.625)(x/1000)(4)=21

Solve for x and you get $8400, once your account hits that amount you will be paying the same as you would for HSA Bank and it will continue to get more expensive the more $$ in the account.
https://healthsavings.com/vanguard/fees/

Health Equity - no money in their account/all in investments [UPDATED]
$36/year and 2 basis points/month for investing (.24%/year)

Using the same formula above for Health Savings you can see how quickly you can get to the amount that would be worth it to go to HSA Bank
(.2)(x/1000)(12)=30

x = $12,500

http://healthequity.com/indexinvestor/
http://healthequity.com/ed/resources/docs/member_fees_uc.pdf


Select Account - must have $1000 in their account to invest
$30 a year +
$1/month and $18/year for investment account = $30/year
If you said that $1000 should earn 7% annually, it would cost you $70 a year to keep it in their account, effectively making it possibly $100 a year, granted some years will be more/less than others. I think with lack of returns on the 1k this will cost more regardless. Even if you only receive 3.6% on returns on average annually you would break even with HSA Bank.
https://mnscsc.org/scsc/media/insurance/docs/hsa-fee-rate-schedule16.pdf

Optum[/b] - $3 monthly Maintenance Fees and have to have 2000 in account that's not invested

I have not looked at any additional fees for investing through these companies other than what is shown in the above info.
Any other options out there that people suggest?

« Last Edit: March 06, 2017, 02:26:43 PM by live4soccer7 »

live4soccer7

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Re: Best HSA Custodian? 2017
« Reply #4 on: March 04, 2017, 03:06:29 PM »
Looking at just the options above it seems HSA Bank or Health Equity are the best options so far. Health Equity may win over as I think it may be the easiest to get in to some vanguard admiral funds. I need to try and find out more on their fees.

C'mon guys, lets dig down on this one. Any other options out there that compete? I don't mind doing the research on some valid options and presenting them as I have above.

Rural

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Re: Best HSA Custodian? 2017
« Reply #5 on: March 04, 2017, 03:59:40 PM »
Looking at HSA bank,s website, I see two investment options, TD Ameritrade and Devinir, and I can't figure out how to see which funds are available. Anybody find it? I clicked on the HSA investment link.

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Re: Best HSA Custodian? 2017
« Reply #6 on: March 04, 2017, 04:55:01 PM »
We have our HSA at Elements Financial because it allows us to get to the TD Ameritrade platform where we can invest in commission-free Vanguard ETFs.  However, it costs $24 to wire the money from EF to TDA.  Previously, we were sitting in a large cash position, so we only had to wire the money once.  We also have $2,500 sitting in cash at EF to avoid the $3 a month fee.  Our HSA isn't perfect, but it has allowed us to get $30k+ in VTI EFTs.  We used to use Alliant Credit Union, but it was not a good option for investing.  I hope this helps.  Ed

live4soccer7

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Re: Best HSA Custodian? 2017
« Reply #7 on: March 04, 2017, 07:55:56 PM »
Looking at HSA bank,s website, I see two investment options, TD Ameritrade and Devinir, and I can't figure out how to see which funds are available. Anybody find it? I clicked on the HSA investment link.

I am not sure. I know there is a list of commission free Vanguard funds to choose from through TD Ameritrade

It seems that maybe Health Equity could be the lowest cost option, however I get the feeling that there are more fees than just the $3.95 a month fee.

Anyone have more information on Health Equity?
« Last Edit: March 04, 2017, 07:58:20 PM by live4soccer7 »

live4soccer7

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Re: Best HSA Custodian? 2017
« Reply #8 on: March 05, 2017, 12:25:38 AM »
I updated some information on Health Equity.

I think for someone just starting an HSA, Health Equity would be the best option. It seems most of the companies will charge an account closing fee and one to transfer funds as well which appear to be about $25 each. Possibly about $50 to switch from custodian to another. Considering someone single can put only $3400 in it in 2017 it will take a little bit to accrue $12,500. Once you get that much then you could switch over to HSA bank or look at the options after a few years have passed to see if they have changed. The basis points will add up if the accounts get larger so paying the $66 yearly fee at HSA bank would definitely be worth it when you are above 12,500 and plan to keep adding to it.

camillus

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Re: Best HSA Custodian? 2017
« Reply #9 on: March 05, 2017, 02:16:30 AM »
I think for someone just starting an HSA, Health Equity would be the best option.
This is right. The fee structure is different between HSA Bank and HealthEquity, with HSA Bank having flat fees while HealthEquity has fees tied into the size of your balance via basis points.

I also wanted to chime in that simplicity is really important. If your employer has a decent HSA offering, stick with it.

I recently created quite a headache for myself. My employer offered a less than stellar HSA, so I enrolled at HSA Bank and rolled things that way and opened a TD Ameritrade brokerage window there. A month later, my employer switched HSA providers to HealthEquity, which met my satisfaction as a one-stop shop HSA. But there I was, with 4 accounts all tied to HSAs that I needed to untangle.

One advantage of HealthEquity over HSA Bank is the interface is a lot more streamlined and you don't have to open another account at TD Ameritrade. There is some time lag between selling ETFs at TDA and those funds being available to be transferred back to HSA Bank, and then transferred to your checking account. It seemed unnecessarily complicated.

HealthEquity on the other hand is a "one stop shop" as I mentioned. You do your investing and withdrawing all in the same space. The Vanguard offerings are complete.

Also, very importantly, making contributions to your employer sponsored HSA saves you 7.65% on payroll tax. So if you max out a family HSA through your paycheck, you save $516 over contributing directly from your checking account. Not a bad guaranteed return! :-)

What some people do is contribute to bad employer HSA accounts via payroll and then once a year roll that money to your "investment" HSA.

VladTheImpaler

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Re: Best HSA Custodian? 2017
« Reply #10 on: March 05, 2017, 04:36:56 AM »
I'm on the Thriftsaver plan at SelectAccount, no fees if you keep $2500 minimum balance and invest the rest. Vanguard index funds available.

Case

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Re: Best HSA Custodian? 2017
« Reply #11 on: March 05, 2017, 11:48:45 AM »
I have an HSA plan this year and want to utilize this for many reasons. I want to simply contribute to it each year and invest it. I do not plan to withdraw anything from it unless there was an absolute emergency that required it, but I don't foresee that happening (do we ever though??). I should be able to cover any medical expenses out of pocket and save the receipts for later.

I'm looking at the lowest cost custodian to invest in index/mutual funds. I'd rather not have to keep money in the HSA at the bank, but rather have it all invested. From what I've seen this usually incurs a fee. I'll likely invest in one fund and just keep adding to that one fund each year when I contribute.

I should be able to include this in a payroll withdrawal/deduction at the end of the year as I have an S-Corp structure.


Let me know what you guys think. Thanks for any assistance!

I have had health equity through an employer for 4 years and fortunately my employer is switching.
I will tell you that Health Equity has been a disaster to work with.  They have messed up transfers routinely, and their customer service sucks.  In order to get back a wrongly charged $25, I had to escalate to a BBB complaint, and then directly to one of their VPs (and even after all that, the same problem occurred a year later).

At the time, Health Equity also had shitty investment options, but it appears (from users posting here) they offer Vanguard now.

Take my advice, RUN away from Health Equity.
HSA bank has been the favorite for a long time; I recommend there.

inthemountains

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Re: Best HSA Custodian? 2017
« Reply #12 on: March 05, 2017, 12:04:39 PM »
I've used HSA Bank for a number of years. I've had a good experience. I invest through TD Ameritrade, which works for me because that's where my 401K lives. I can invest in the same funds as my solo 401K (saves time in research) or diversify if I'm feeling feisty.

Kriegsspiel

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Re: Best HSA Custodian? 2017
« Reply #13 on: March 05, 2017, 05:25:48 PM »
Looking at HSA bank,s website, I see two investment options, TD Ameritrade and Devinir, and I can't figure out how to see which funds are available. Anybody find it? I clicked on the HSA investment link.

With TD Ameritrade you can buy Vanguard ETFs. Use dividends to pay for the year's custodial fees, and DRIP the rest.

Rural

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Re: Best HSA Custodian? 2017
« Reply #14 on: March 05, 2017, 06:06:57 PM »
Looking at HSA bank,s website, I see two investment options, TD Ameritrade and Devinir, and I can't figure out how to see which funds are available. Anybody find it? I clicked on the HSA investment link.

With TD Ameritrade you can buy Vanguard ETFs. Use dividends to pay for the year's custodial fees, and DRIP the rest.


Thanks, KS. I need to move a chunk from the company chosen by work to somewhere with decent investment options,and HSA Bank looks like the best option going for investing ~ $15k.

Kriegsspiel

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Re: Best HSA Custodian? 2017
« Reply #15 on: March 05, 2017, 06:09:45 PM »
I just put all mine into VT and forget about it for a while.

camillus

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Re: Best HSA Custodian? 2017
« Reply #16 on: March 05, 2017, 06:22:18 PM »
I have read reports online that people were having trouble getting their full dividend distributions out of their HealthEquity funds. I plan on monitoring my account closely.

Gin1984

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Re: Best HSA Custodian? 2017
« Reply #17 on: March 05, 2017, 06:23:23 PM »
What about wells Fargo, they seem to have one decent s&p500 and no fees if you have over $5000.

Sent from my SPH-L710 using Tapatalk

« Last Edit: March 06, 2017, 12:27:56 PM by Gin1984 »

live4soccer7

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Re: Best HSA Custodian? 2017
« Reply #18 on: March 05, 2017, 08:11:29 PM »
Seems like HSA Bank is the WAY to go. I'll probably just start there and end up there for good.

dragoncar

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Re: Best HSA Custodian? 2017
« Reply #19 on: March 05, 2017, 09:13:08 PM »
Seems like HSA Bank is the WAY to go. I'll probably just start there and end up there for good.

FWIW, I have a brokerage window but they don't seem to charge me the extra fee

dcozad999

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Re: Best HSA Custodian? 2017
« Reply #20 on: March 06, 2017, 12:21:54 PM »
I have an HSA plan this year and want to utilize this for many reasons. I want to simply contribute to it each year and invest it. I do not plan to withdraw anything from it unless there was an absolute emergency that required it, but I don't foresee that happening (do we ever though??). I should be able to cover any medical expenses out of pocket and save the receipts for later.

I'm looking at the lowest cost custodian to invest in index/mutual funds. I'd rather not have to keep money in the HSA at the bank, but rather have it all invested. From what I've seen this usually incurs a fee. I'll likely invest in one fund and just keep adding to that one fund each year when I contribute.

I should be able to include this in a payroll withdrawal/deduction at the end of the year as I have an S-Corp structure.


Let me know what you guys think. Thanks for any assistance!

I have had health equity through an employer for 4 years and fortunately my employer is switching.
I will tell you that Health Equity has been a disaster to work with.  They have messed up transfers routinely, and their customer service sucks.  In order to get back a wrongly charged $25, I had to escalate to a BBB complaint, and then directly to one of their VPs (and even after all that, the same problem occurred a year later).

At the time, Health Equity also had shitty investment options, but it appears (from users posting here) they offer Vanguard now.

Take my advice, RUN away from Health Equity.
HSA bank has been the favorite for a long time; I recommend there.


My company switched from Health Equity this year as well. If I remember correctly Health Equity had massive monthly fees on the Vanguard Index funds because my company was not sponsoring (if that's the right word) those funds. If I were you I would double-check the fees before you make your decision.

Here's a discussion on the extra fees from a few months ago. Scroll about halfway down to my posts.

http://forum.mrmoneymustache.com/ask-a-mustachian/what-is-the-best-health-savings-account-(hsa)/
« Last Edit: March 06, 2017, 12:27:22 PM by dcozad999 »

sw1tch

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Re: Best HSA Custodian? 2017
« Reply #21 on: March 06, 2017, 01:17:15 PM »
Posting to subscribe to this... I'll be rolling over my HSA later this year.

boarder42

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Re: Best HSA Custodian? 2017
« Reply #22 on: March 06, 2017, 01:24:54 PM »
we've got optum its 3 bucks a month maint fees. unless i'm overlooking something. but 2k goes uninvested.  which isnt the best.

live4soccer7

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Re: Best HSA Custodian? 2017
« Reply #23 on: March 06, 2017, 02:27:26 PM »
Thanks for the new provider. I have added it and the information you provided to the list above in the thread.

camillus

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Re: Best HSA Custodian? 2017
« Reply #24 on: March 06, 2017, 03:04:13 PM »
Quote
If I remember correctly Health Equity had massive monthly fees on the Vanguard Index funds because my company was not sponsoring (if that's the right word) those funds.
With my employer plan, which I believe is the norm, I'm charged 40 basis points to hold vanguard funds, which themselves have expense ratios around 10 basis points.

40 bp on $10,000 is $40/year, or $3 a month - perhaps not "massive."

sobezen

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Re: Best HSA Custodian? 2017
« Reply #25 on: March 16, 2017, 04:07:15 PM »
has anyone successfully paid the hsa fees using an external account eg checking account?

also anyone here have experiences they can share about saturna? currently have elements hsa but they require $2,500 in the money market and it must remain inside the mm before investing with tdameritrade. the current hsa is only $4,300 and i can't contribute more.

live4soccer7

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Re: Best HSA Custodian? 2017
« Reply #26 on: April 17, 2017, 10:57:01 PM »
Has anyone setup a 125 Cafeteria Plan before? I'm looking to do this through my business so I can save on FICA taxes by using payroll deduction to pay for most of the HSA. I believe you can payroll deduct up to 2600 for the HSA for 2017 (max HSA is 3400 for 2017).

Is this something that's going to be a HUGE hassle or is it fairly easy?

protostache

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Re: Best HSA Custodian? 2017
« Reply #27 on: April 18, 2017, 05:20:50 AM »
I haven't bothered with a 125 plan. Instead I set up another "S-corp owner healthcare" benefit within Gusto and named it "HSA contributions". That ensures it gets added to box 1 wages but not FICA wages.

You can get a 125 plan from Core Documents. I don't think they're too expensive.

live4soccer7

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Re: Best HSA Custodian? 2017
« Reply #28 on: April 18, 2017, 10:57:00 AM »
Quote
Instead I set up another "S-corp owner healthcare" benefit within Gusto and named it "HSA contributions".

Can you elaborate on this a little more. You lost me, somewhat.

protostache

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Re: Best HSA Custodian? 2017
« Reply #29 on: April 18, 2017, 01:41:12 PM »
My payroll provider Gusto lets me set up benefits in varying categories. One of those categories is called "S-corp owner health benefit". The practical impact of that benefit is that it gets added to your W2 box 1 wages but not your FICA or Social Security wages. This is primarily used for the self-employed healthcare deduction, which has to show up in your wages but is exempt from FICA/SS and then taken as a top line deduction on form 1040.

I have two of these set up: "Health Insurance" and "HSA Contributions".

My accountant has assured me that this is the correct way to set it up, but you should definitely talk to your own about it.
« Last Edit: April 18, 2017, 01:55:22 PM by protostache »

live4soccer7

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Re: Best HSA Custodian? 2017
« Reply #30 on: April 18, 2017, 01:49:45 PM »
Thank you very much for the information. I appreciate the thoroughness.