This is my first year with an HSA that comes with my health insurance through work. I'm trying to understand some of the nuances that come with investing using this account. It seems like there's lots of variety in HSAs available, but each one has its own obscure rules with account fees, minimum balances, and the like.
Also, the portal that I access my HSA through is a third party to the bank holding the HSA which is a third party to Schwab for the brokerage account. When I tried calling for information, the person who answered the phone had no idea it was even possible to connect the HSA to a brokerage account. Needless to say, there's lots of gaps and missing info.
So far, this is what I've figured out:
1) $24 annual fee to use the brokerage
2)$1000 minimum cash balance in the HSA to contribute to the brokerage account (ergo an opportunity cost fee)
3)I get a couple pennies each month in interest? Can't find any information anywhere about what the interest rate is, but it's probably not more than 0.10%
4)can't find any fee schedule for general account fees
In terms of mutual funds, the options aren't too bad but not exactly what I'd want either. I will probably just use "Schwab S&P 500 Index" with a 0.09 expense ratio since it's the lowest available in the account.
How does this sound on the surface? In particular I'm not happy about the $1k minimum cash balance to invest. At the same time, I don't fully understand how HSA portability works. I know that by contributing via payroll deductions to the HSA provider selected by my employer, I'm avoiding FICA taxes, but if I contribute directly I have to pay FICA. Is it possible to keep this account open for the FICA tax benefit, then transfer to some other HSA to invest? Is it worth the hassle?