Author Topic: DH's employer ends HSA, what to do now?  (Read 1050 times)

Gin1984

  • Magnum Stache
  • ******
  • Posts: 4653
DH's employer ends HSA, what to do now?
« on: December 07, 2015, 02:44:28 PM »
My DH's employer is ending his HSA plan and he is moving on to mine in 2016.  All of which is fine, but we have his HSA with HSA bank which charges $3/month unless you have $5000 in the bank.  Here is the issue, we don't make enough not to use our HSA and my medical cost are $1300 minimum/year.  Also we plan to have a kid in 1.5 year ish which should cost us our OOM of $5000.  We only have $4846.78 in investments plus about $700 which we can remove from this year (was not planning to until 2016 to fund part of my Roth IRA).
So my thought was to move it all to cash, find a high yield somewhere, pay the $25 to get out of HSA bank and use all of my 2016 HSA for investing.  Any ideas if this is a bad plan, ideas for a better one and places where I can find a higher yield without many fees.

MDM

  • Walrus Stache
  • *******
  • Posts: 8974
Re: DH's employer ends HSA, what to do now?
« Reply #1 on: December 07, 2015, 06:32:54 PM »
This thread: http://forum.mrmoneymustache.com/taxes/good-hsa-providers/ has a few suggestions.

Terms and conditions can change, but at least that thread is only a few months old.

jda1984

  • Stubble
  • **
  • Posts: 179
Re: DH's employer ends HSA, what to do now?
« Reply #2 on: December 08, 2015, 07:06:06 AM »
I haven't looked into it extensively, but I think you need to be careful to make it a rollover transaction and not a withdrawal to a true cash account.  For one thing, you'll end up with a tax penalty for non-medical expense and two you'll use a large portion of your annual contribution limit on the new account (if you end up moving it to a new HSA).