Author Topic: Does my HSA suck?  (Read 2570 times)

Britan

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Does my HSA suck?
« on: October 27, 2015, 10:32:29 AM »
So now that I am 26 and on my own health insurance plan, I picked a high deductible HSA.

Let's ignore for a moment that my premiums are going up by $30/month next year, AND the deductible is going up by $1,500 at the same time.

I think my HSA sucks. I don't know that it's any worse than anywhere else, and I don't know if I can switch it or how.

Here's the long story:

I have an HSA through Benefit Wallet (the default of my health plan: it was already set up for me). Here are the fees:

  • Interest Rate: 0.050% - is this to me? or from me?
  • APY: 0.050% - same as above?
  • Monthly service charge for balance under $1,000: $3.5
  • Paper statement: $1.25 per statement. No idea how to opt out of paper statements
  • Want to invest? That's going to be $2.90/month to use their investment platform

I've got a pending deposit of $1,000 to avoid the $3.50 fee (though it's been 2 weeks and they still haven't processed it yet), but besides that I have nothing in it yet.

So questions.

Is it usual for an HSA to charge you to invest? If so, $2.90/month "reasonable", i.e.: I'm not going to get a better deal anywhere else?

If it's not usual, can I switch my HSA now that I have it open? If so: (1) to what service and (2) how?

Edited to add: Haha, apparently it's HSA day on the MMM forums.
« Last Edit: October 27, 2015, 10:34:42 AM by Britan »

HazelStone

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Re: Does my HSA suck?
« Reply #1 on: October 27, 2015, 11:00:20 AM »
Switching HSA providers is about the same amount of paperwork as switching where you hold your IRA.

Some providers will require a minimum of several grand to allow use of their investment options.
A fee of a couple bucks a month is pretty standard (which, again, can be waived for balances above a certain threshold). This usually applies even if your balance is in cash. The standard insurance agent response is "$25-30/year against tax writeoff of several grand- you still come out ahead."

The paper statement fee while burying the online option is a little shady. Sounds like their interface is poorly designed. You may find improvements on one or two variables but I would be surprised indeed to see an HSA custodian offer no fees and investing at "only" $1000 balance. The accounts sometimes come free-to-user from group policies, but then the employer is paying that expense or the insurance company offers it as a courtesy.

Britan

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Re: Does my HSA suck?
« Reply #2 on: October 27, 2015, 11:09:45 AM »
Hmm, ok, that's good to know. I'll probably stick with it then.

I wish this HSA was offered by my employer. But hey, when HR asks (again for the fourth time) how to get young healthy people like me on their plan so their rates go down, I will (again for the fourth time) tell them that young healthy people like me don't want their $0 deductible $500/month employee premium plan, we want an HSA. And (again for the fifth time) they will not listen and continue offering the same thing.

I think I might try calling them about the paper/online statement thing because their online interface is ridiculous.

As for the investing fee, does it make sense to invest the $1,000 I have now and take the $2.90 fee? I mean... I suppose I would expect to gain more than $2.90 in the next month...right?

mandy_2002

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Re: Does my HSA suck?
« Reply #3 on: October 27, 2015, 11:17:00 AM »
  • Interest Rate: 0.050% - is this to me? or from me?
  • APY: 0.050% - same as above?


To answer one of your questions, yes, this is the interest rate that you make on your money if it is held in cash.  Just to do a little fun math, for the $1000 that you're putting in now, this would earn $0.50 in a year.  My HSA is held by my 401k provider, both of which were set up by my employer, so I can't judge what they are doing fee-wise.  Do you have a 401k with a provider that you could check for better fees?

Britan

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Re: Does my HSA suck?
« Reply #4 on: October 27, 2015, 11:23:31 AM »
  • Interest Rate: 0.050% - is this to me? or from me?
  • APY: 0.050% - same as above?


To answer one of your questions, yes, this is the interest rate that you make on your money if it is held in cash.  Just to do a little fun math, for the $1000 that you're putting in now, this would earn $0.50 in a year.  My HSA is held by my 401k provider, both of which were set up by my employer, so I can't judge what they are doing fee-wise.  Do you have a 401k with a provider that you could check for better fees?

Ahaha. Sorry, it's just funny because my 401k through my employer has objectively terrible fees. And no index fund investment options. )':

Maybe I'll check with friends/family who are employed by companies that actually have good benefits to see what their interest and fees look like. ;_;

But thank you for answering that question! Good to know that at least it's coming TO me and not FROM me. :)

Daddyfatsax

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Re: Does my HSA suck?
« Reply #5 on: October 29, 2015, 01:00:06 AM »
We have the same HSA company! Exact same fees and everything. When I did the math, it didn't make sense to me to invest for several years. A balance of 10k makes that still .348% added expense ratio (rough math since I just added up the monthly fee). I'm just letting mine sit in the savings. I thought about rolling to another company, so I went to Vanguard's website. They link to a company that charges $40 a year! That's higher than the $34.80 we'd be paying to invest. Obviously get to a balance of over $1000 asap but I do not think it is worth it to invest in the first few years when the fees are a larger percent of the account balance. I leave it as a cash portion to my stocks in other accounts of my portfolio (sorry your 401k sucks).