The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: terran on November 15, 2018, 11:09:28 AM
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Some news people here might be interested in: Fidelity has long offered employer sponsored HSAs, but as of today they're offering them to everyone. It appears they're generally fee free except for any investing fees that any Fidelity account would have, but with plenty of good Fidelity mutual funds and commission free iShares ETFs that shouldn't be a problem. I haven't yet seen anything indicating what other fees there may or may not be (such as transfer fees, etc).
More info here: https://www.fidelity.com/go/hsa/why-hsa
Here's a Bogleheads thread that started a few days ago when news that this might be happening leaked (starting part way through page 2 there are posts with info about the new account once more information came out): https://www.bogleheads.org/forum/viewtopic.php?f=10&t=263661
My wife will probably move her HSA, currently with Lively, to stop paying the $2.50/month investment fee and to consolidate as most of our other accounts are with Fidelity. Her employer sponsored plan will remain with Optum so she can continue to contribute through payroll deductions to avoid FICA tax, and then we'll do an indirect rollover once a year (limited to once every rolling 12 month period).
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This is very cool and thanks for posting it.
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Very cool! Thanks!
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Oh man, we signed up my wife for a Lively account just last week. Argh.
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Perfect timing as my wife and I are about to open an HSA for her in the next few weeks. Thanks!
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Thank you thank you thank you!
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This is great and timely news. I am leaving my company tomorrow and have a 401k & HSA to roll over. All of my other accounts are already with Fidelity. I was wondering where the HSA was gonna go. Thanks!!!
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Cool, thanks! I'm with health equity now, which charge $36 per year, plus 0.24%. Plus ER. I could save about $70+ per year by switching.. Tempting!
Anyone care to comment on the ETF selection? Of fidelity funds I only see weird factor and sector ones. No total market?
edit; looks like have to go with iShares. ITOT + IXUS. ER of 0.03 and 0.10% respectively.
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Has anyone found the fee schedule for the Fidelity retail HSA? I looked briefly, but didn't see anything.
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Anyone care to comment on the ETF selection? Of fidelity funds I only see weird factor and sector ones. No total market?
edit; looks like have to go with iShares. ITOT + IXUS. ER of 0.03 and 0.10% respectively.
You should look to confirm that they're available in the HSA (I think they are), but ITOT and IXUS are good options, as are any of the Fidelity mutual funds listed here: https://www.bogleheads.org/wiki/Fidelity
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I'm a little confused. Can truly anyone open one of these accounts? It says you have to have an HSA-eligible health plan, and my health plan is through my employer. So if I didn't have access before, I still don't now...
Yes, you have to have an HSA eligible health plan to open an HSA. This is true of opening an HSA anywhere (or at least true of funding an HSA, and not much point opening if you can't fund). Many employers offer HSA elible health plans. I suspect you could also open an HSA as long as you have an existing balance in an HSA from previously being in an HSA eligible health plan even if you're no longer in such a plan, but you won't be able to make new contributions. This is an IRS thing, not a Fidelity thing.
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I'm a little confused. Can truly anyone open one of these accounts? It says you have to have an HSA-eligible health plan, and my health plan is through my employer. So if I didn't have access before, I still don't now...
Yes, you have to have an HSA eligible health plan to open an HSA. This is true of opening an HSA anywhere (or at least true of funding an HSA, and not much point opening if you can't fund). Many employers offer HSA elible health plans. I suspect you could also open an HSA as long as you have an existing balance in an HSA from previously being in an HSA eligible health plan even if you're no longer in such a plan, but you won't be able to make new contributions. This is an IRS thing, not a Fidelity thing.
The part that's really confusing me is the idea that an employer would offer you an HSA-eligible plan but not an employer-sponsored HSA. Or is this more targeted at people on ACA plans?
Gotcha, yes you're right. The thing is, most HSAs are pretty crappy, especially for those of us who want to invest our HSAs. The combination of low or no fees and good investment options is often worth having two HSAs: one which your employer contributes to via payroll deductions (avoiding FICA tax) and one which you transfer funds to every so often from your employer sponsored HSA. Previously Lively was (IMO) the best option for that, but it's looking like Fidelity may now be an even better option.
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We have an HSA from my husband’s old job that we can’t invest and are paying fees on. And to add insult to injury, doesn’t pull into Mint. So excited by this news. I’m going to research if we want to move his current job’s hsa over too.
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I'm a little confused. Can truly anyone open one of these accounts? It says you have to have an HSA-eligible health plan, and my health plan is through my employer. So if I didn't have access before, I still don't now...
Yes, you have to have an HSA eligible health plan to open an HSA. This is true of opening an HSA anywhere (or at least true of funding an HSA, and not much point opening if you can't fund). Many employers offer HSA elible health plans. I suspect you could also open an HSA as long as you have an existing balance in an HSA from previously being in an HSA eligible health plan even if you're no longer in such a plan, but you won't be able to make new contributions. This is an IRS thing, not a Fidelity thing.
The part that's really confusing me is the idea that an employer would offer you an HSA-eligible plan but not an employer-sponsored HSA. Or is this more targeted at people on ACA plans?
Gotcha, yes you're right. The thing is, most HSAs are pretty crappy, especially for those of us who want to invest our HSAs. The combination of low or no fees and good investment options is often worth having two HSAs: one which your employer contributes to via payroll deductions (avoiding FICA tax) and one which you transfer funds to every so often from your employer sponsored HSA. Previously Lively was (IMO) the best option for that, but it's looking like Fidelity may now be an even better option.
I think a lot of small companies probably offer HSA-compatible health plans without a formal, company HSA savings account/plan. We offer a few HSA health plan options, but employees select their own account holder. I do this and used Vanguard, as that is where most of my accounts were.
Appreciate this info!
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Oh, fantastic. I have been looking for a new option.
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The part that's really confusing me is the idea that an employer would offer you an HSA-eligible plan but not an employer-sponsored HSA. Or is this more targeted at people on ACA plans?
My employer, for one - I have a HDHP, but the company doesn't offer an HSA. I opened my own HSA at Health Equity early last year. The real downside of not having an employer sponsored HSA is that my company won't do direct deposit into my external HSA, so I lose out on some of the tax benefits. When I filed taxes, I got back the income tax for the money I contributed, but they don't give back the SS tax.
I'll have to see if it's worth switching - I'm not currently contributing to my HSA because my husband's plan is better through his employer, so we're just contributing the family max to his. Still might be worth savings on fees on what I already put in, though...
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Anyone care to comment on the ETF selection? Of fidelity funds I only see weird factor and sector ones. No total market?
edit; looks like have to go with iShares. ITOT + IXUS. ER of 0.03 and 0.10% respectively.
You should look to confirm that they're available in the HSA (I think they are), but ITOT and IXUS are good options, as are any of the Fidelity mutual funds listed here: https://www.bogleheads.org/wiki/Fidelity
It's unclear. When you click "investment choices for HSA" it just sends you to the generic list of funds/ETFs that fidelity offers in general. So presumably it means you can invest in anything they have.. I think. And actually the fido index funds are cheaper than iShares ETF, so that's even better (1.5 and 6 bps).
Currently with Health Equity I'm paying effectively ~50 bps. With fidelity it would be 1/10th of that. Saving me about $100/year now, and $200 pa in 5 years.
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I'm new to HSAs. Self-employed, and I have a plan through the ACA marketplace that I pay for myself.
I'm likely going to go with a Bronze HSA-eligible plan next year, through Kaiser Permanente. I was under the impression that Kaiser itself administered the HSA plan, or that they organized it through a third party.
But this seems like I can just sign up through Fidelity, and as long as I have a HSA-eligible ACA plan, I can contribute to the Fidelity HSA? Is that correct?
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I'm new to HSAs. Self-employed, and I have a plan through the ACA marketplace that I pay for myself.
I'm likely going to go with a Bronze HSA-eligible plan next year, through Kaiser Permanente. I was under the impression that Kaiser itself administered the HSA plan, or that they organized it through a third party.
But this seems like I can just sign up through Fidelity, and as long as I have a HSA-eligible ACA plan, I can contribute to the Fidelity HSA? Is that correct?
They very well might, but you have no obligation to use the plan they suggest. There is some possibility that they offer some kind incentive that goes into the HSA, which would have to go into the one they set up, but I don't know how common that is.
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Thanks to @DeepEllumStache for the point here! Now I can try to get my HSA out of UMB's hands.
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Interesting. I just got done setting up a Saturna account (hasnt been funded yet), which was supposedly the best HSA option for investing in terms of lowest fees, etc. This looks like maybe a better alternative? Sigh, back to research ;).
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A fellow UMB account breaking free! Freedom from watching those funds slowly waste away with the "paper statement fee" that is higher than the interest they pay.
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This is awesome! I currently have my HSA with HSA Bank; they're fine but they do charge some minor fees and I find their website clunky. I have my SE401k through Fidelity so it would be nice to consolidate.
I just sent them a secure email asking about fees and fund available. I will let you all know what I find out.
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Thanks for this info! I just set up the account, it only took a few minutes since I already have an account at Fidelity. I will look into transferring the balance of my old HSA out of Optum tomorrow.
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The part that's really confusing me is the idea that an employer would offer you an HSA-eligible plan but not an employer-sponsored HSA. Or is this more targeted at people on ACA plans?
My company. I spoke with someone in HR about this a while ago and asked if they were considering offering a HSA plan. The guy said he doubted it and that I was the first person ever to ask about it.
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From Fidelity this am:
"Thank you for your interest in Fidelity's Individual Health Savings Account (HSA). I hope you are well.
Yes, Fidelity has recently expanded it's product offering to include Individual Health Savings Accounts (HSA). The account is free to open and maintain. The HSA account is a Brokerage registration, which means you can invest in a wide variety of investments including stocks, Exchange Traded Funds (ETFs), mutual funds, bonds and more."
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Excellent news. I currently have Health Equity through work. Seems I just need to stop using them for investing and then initiate a rollover to Fidelity and do my own transfers every month or so.
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If it’s truly free besides expense ratios of investments and I can invest in the super cheap Fidelity index funds I will be moving my HSA money for sure.
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Thanks for posting. Might need to consider moving my account as well
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HSA moved!
Thanks again for the heads up @terran
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Yep, thanks for the heads up! Was great timing, as I was in the process of getting set up with Saturna Capital.
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You're most welcome! Looking forward to making the move too! Turns out Lively has an early termination fee for accounts held less than a year, so we'll probably at least need to leave it open with a small balance for a few months.
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Interesting. I just got done setting up a Saturna account (hasnt been funded yet), which was supposedly the best HSA option for investing in terms of lowest fees, etc. This looks like maybe a better alternative? Sigh, back to research ;).
Please report back! I opened and funded a Saturna account for 2017 and 2018 for the same reasons (put the money in VGHCX, Vanguard Health Care Fund), but I do have Fidelity accounts and it could be simpler to have the HSA at Fidelity.
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Please report back! I opened and funded a Saturna account for 2017 and 2018 for the same reasons (put the money in VGHCX, Vanguard Health Care Fund), but I do have Fidelity accounts and it could be simpler to have the HSA at Fidelity.
Well, I ended up cancelling Saturna Capital and went with Fidelity -- they confirmed over the phone there are no account maintenance fees or anything like that, and I believe they are the only ones doing anything like this. Fidelity has some excellent index funds, so it seemed like a no brainer. Another advantage of Fidelity is the vastly superior interface compared to the very old school Saturna Capital. That said, SC is still a superb option, and it may or may not be worth switching over since you already have funds there. I believe Saturna Capital is like $25/year or something IRRC (for the Vanguard purchase transaction fee). SC has no maintenance fee, its just the transaction fees.
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I created my Fidelity HSA, and initiated the paperwork. Now have to print the form and mail it in.
My current HSA is through UMB, which had $1k in the HSA account, and ~$18k in the investment portion.
I initiated a sell of those funds, and will move everything into HSA as cash before I initiate the transfer. *fingers crossed* that this is relatively painless and finalized before the year is over. I have had the WORST luck with anything I attempt to do with my retirement accounts.
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Has anyone made any progress transferring funds to Fidelity's new HSA? They sat on my transfer paperwork until I called and then it was "Oh, it's right here. We'll get started on it." I'm now waiting on a transfer from a bank's HSA (all cash) and it's taken a month so far. Another transfer from Health Savings Administrators has an expected date in late January (60 days!?!).
I realize that they were probably inundated with transfers but if there's not progress, I'm leaning to cancelling and going to Lively.
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Yep, I'm in the same boat. They told me 3 weeks on the phone; it's been the holidays so I'm trying to be patient. It helps that the market has tanked while the funds have been in cash.
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Our transfer made it over. So pleased.
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Our transfer made it over. So pleased.
Woohhooo! Finally figured out how to do an e-sig without printing last weekend =D
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I hit a snag in that Lively told me to initiate the transfer with Fidelity and that TD Ameritrade would ask Lively for permission automatically, which they did, but only after rejecting the transfer. So I had TD Ameritrade sending me a message that the transfer was approved and to go ahead and initiate it, and Fidelity saying something had gone wrong and to call them. I called Fidelity and told them TD Ameritrade was ready to transfer and Fidelity reinitiated the transfer. That little mixup added a few days, but overall not too bad. In total the transfer was initiated 11/26 and ultimately went through 12/12.
I think it being brokerage to brokerage helped as they probably have built in systems for that. Transferring from a bank that Fidelity isn't used to dealing with is probably what's causing the problem.
Have you considered in an indirect rollover? Last year when I transferred from HSA Bank to Lively I just withdrew from HSA Bank like I would to reimburse myself for medical expenses and then had Lively pull from my bank account and code the contribution as a rollover. You can only do one of these once per rolling 12 month period (not calendar year).
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I'll probably do an indirect rollover for one of them. I'll make that decision next week. Lively just stopped charging fees, which makes it an easier decision if I bail on Fidelity.
The good news in all of this is what tralfamadorian mentioned: the timing is great. Being all cash has saved me at least $1000.
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Also of note, and something I had forgotten about, Fidelity has zero expense ratio index funds: FZROX (US) and FZILX (International).
So you can have an HSA with zero fees all around.
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My DH FIREd a little over two years ago and had an old HSA at an account through his former employer. We kept maxing out my HSA as we are on a family-plan HDHP and since he is over 50 , we continued to make the $1,000 catch-up contribution to his HSA. We were thrilled to see that Fidelity began to offer the Individual HSA in November and initiated the transfer from the previous institution (a bank) the same day it became available through Fidelity. We had to mail in the paperwork, which made it take a bit longer, but the transfer was completed and posted to the Fidelity account on December 17. I was able to order a debit card and checks (free) online very easily. I would imagine they've been inundated with new account requests but was pleased to see it all got completed in fairly short order.
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Also of note, and something I had forgotten about, Fidelity has zero expense ratio index funds: FZROX (US) and FZILX (International).
So you can have an HSA with zero fees all around.
This is awesome! I was notified yesterday that Fidelity processed my TOA form and it has been sent to UMB Bank for their side.
Anyone transfer out of UMB and can share how long that part took?
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Also of note, and something I had forgotten about, Fidelity has zero expense ratio index funds: FZROX (US) and FZILX (International).
So you can have an HSA with zero fees all around.
This is awesome! I was notified yesterday that Fidelity processed my TOA form and it has been sent to UMB Bank for their side.
Anyone transfer out of UMB and can share how long that part took?
It took UMB about 5 business days on ours.
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It took a few weeks. I did have to secure message Fidelity a few times, but once there was movement in their "Tracker" it took ~3 weeks to complete.
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Not 2B1S but I found out that the long delay for my hsa bank to fidelity transfer was hsa bank inefficiency. I had to make a couple calls after they refused to work with fidelity directly.
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Somehow missed this when initially posted, but glad to have found it! The transfer paperwork can also be submitted to Fidelity by secure message (instead of snail mail), and calling the current HSA custodian to verbally approve the transfer and ask if they have any special signature or transfer requirements can expedite the process too. The HSA transfer took 5 business days, entire process. Very impressed with Fidelity so far.
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Not 2B1S but I found out that the long delay for my hsa bank to fidelity transfer was hsa bank inefficiency. I had to make a couple calls after they refused to work with fidelity directly.
When I did this I just withdrew the money and filled out a transfer form for HSA Bank and did a deposit.
That worked pretty well and was reasonably fast. Though it felt super sketchy.
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I'll ask my employer about this, thanks for the heads up. My HSA is at BofA and they skim a little off the top of each deposit. That sort of singes my stache.
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Not 2B1S but I found out that the long delay for my hsa bank to fidelity transfer was hsa bank inefficiency. I had to make a couple calls after they refused to work with fidelity directly.
When I did this I just withdrew the money and filled out a transfer form for HSA Bank and did a deposit.
That worked pretty well and was reasonably fast. Though it felt super sketchy.
There's nothing wrong or sketchy about what you did, but you do need to make sure you only do it once in an 12 month period (notably, not a calendar year, but a rolling 12 month period) or it will be a distribution instead of a qualified 60 day rollover.
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This week I opened a new Fidelity HSA and funded it for 2019. It was super easy. I've never used Fidelity before, but I was impressed with their website and account set up process.
Now I'm trying to roll over my old HSA into the new Fidelity account. From the Fidelity end this was very straightforward, but I hadn't reckoned with Old HSA Bank shenanigans. I've already spent an hour on the phone with Old HSA Bank, and I'm sure this is just a preview of more to come. [sigh]
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This week I opened a new Fidelity HSA and funded it for 2019. It was super easy. I've never used Fidelity before, but I was impressed with their website and account set up process.
Now I'm trying to roll over my old HSA into the new Fidelity account. From the Fidelity end this was very straightforward, but I hadn't reckoned with Old HSA Bank shenanigans. I've already spent an hour on the phone with Old HSA Bank, and I'm sure this is just a preview of more to come. [sigh]
Rollovers being complicated is intentional I think.
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This week I opened a new Fidelity HSA and funded it for 2019. It was super easy. I've never used Fidelity before, but I was impressed with their website and account set up process.
Now I'm trying to roll over my old HSA into the new Fidelity account. From the Fidelity end this was very straightforward, but I hadn't reckoned with Old HSA Bank shenanigans. I've already spent an hour on the phone with Old HSA Bank, and I'm sure this is just a preview of more to come. [sigh]
Rollovers being complicated is intentional I think.
I agree
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This week I opened a new Fidelity HSA and funded it for 2019. It was super easy. I've never used Fidelity before, but I was impressed with their website and account set up process.
Now I'm trying to roll over my old HSA into the new Fidelity account. From the Fidelity end this was very straightforward, but I hadn't reckoned with Old HSA Bank shenanigans. I've already spent an hour on the phone with Old HSA Bank, and I'm sure this is just a preview of more to come. [sigh]
Can you do a reimbursement through your Old HSA Bank online? Reimburse yourself, deposit to checking and then send a check to Fidelity. As others have said, you can do this 1x/12 mo for it to be an indirect rollover. At tax time, just remember to claim it as such rather than a distribution for medical expenses. You may also avoid transfer fees from Old HSA Bank this way.
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This week I opened a new Fidelity HSA and funded it for 2019. It was super easy. I've never used Fidelity before, but I was impressed with their website and account set up process.
Now I'm trying to roll over my old HSA into the new Fidelity account. From the Fidelity end this was very straightforward, but I hadn't reckoned with Old HSA Bank shenanigans. I've already spent an hour on the phone with Old HSA Bank, and I'm sure this is just a preview of more to come. [sigh]
Can you do a reimbursement through your Old HSA Bank online? Reimburse yourself, deposit to checking and then send a check to Fidelity. As others have said, you can do this 1x/12 mo for it to be an indirect rollover. At tax time, just remember to claim it as such rather than a distribution for medical expenses. You may also avoid transfer fees from Old HSA Bank this way.
Hmmmm!!! neat idea -- thank you! I will investigate this.
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I'll share my learning of transferring from a BoA HSA Account to Fidelity. Overall took 3 months.
First, BoA don't allow transfer of assets in-kind (but hide this in T&C under 'closing an account') and sold all of my investments when they got the transfer request without contacting me.
Initially BoA dragged feet to transfer cash (took about a month after they got request from Fidelity). After they finally sent the cash, BoA canceled the transfer before Fidelity could process it and took their sweet time to redeposit the money into my HSA. Didn't contact me about this (I had to chase them down). Claimed that there was an issue with non-matching account numbers. During all of this, BoA refuses to pass along any info to Fidelity and thus I had to play middle man relaying messages from one to the other.
Got Fidelity to re-submit transfer and 2nd time finally went through after about 1.5 weeks. BoA charged a $25 transfer fee (hidden again in T&C).
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I looked into an indirect rollover, and it looks like a great option. Unfortunately I already initiated the whole thing as a direct transfer, so I am just going to see that through. I don't want to risk messing thing up at this point by switching strategies/methods. I should have read this whole thread more carefully before I started this!
Mailing the Fidelity paperwork today. We'll see how long it takes Fidelity to extract my $ from the clutches of SuckyOldHSABank.
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If I ever do this again, I will try and get the HSA trustee to cut me a check directly and use that "once per year indirect transfer" mechanism others have posted about.
Yikes what a process. Good thing is, hopefully this is the last time for a transfer. Fidelity doesn't seem like a company that would negatively change any of the key fees or account terms. It would take a lot for me to consider a future switch.