Author Topic: Health Equity for HSA?  (Read 3139 times)

TeacherStacking10s

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Health Equity for HSA?
« on: September 25, 2019, 01:47:26 PM »
Anyone have any experience using Health Equity for their HSA account? It is one of the 3 recommended by vanguard. Those that do have their account through them what funds are you invested in? It seemed like VIGIX was an aggressive index fund to invest in for a singel young healthy person. https://healthequity.com/indexinvestor/

I am getting a ridiculous .15% interest from my bank currently. I don't dip into the fund much so I'd like to invest that and put it to work for me.

Thanks all for your expertise.

terran

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Re: Health Equity for HSA?
« Reply #1 on: September 25, 2019, 02:07:08 PM »
I would go with Fidelity or Lively. Both offer investing without any minimums held in cash and don't charge any additional fees. I believe they're the only ones that offer those two features.

frugalnacho

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Re: Health Equity for HSA?
« Reply #2 on: September 25, 2019, 02:42:35 PM »
I had a health equity account through a previous employer.  They required a minimum balance be maintained in cash, I believe it was around $2000.  The rest could be invested.  The funds I had access to were alright, but not as good as something I could have found on my own.  I don't remember specifically what I invested in, but it was an index fund with the lowest ER.

I opened my own account at fidelity which has no required minimum in cash (ie 100% of the account can actually be invested).  It also has much better fund options, including and index fund with an ER of 0.  Yes it actually has an ER of zero, I don't know how they can offer it, I guess it's a loss leader and they are hoping you'll bring more accounts and money to them.

If this is through your employer I recommend you use whatever company they have set up.  You will not have to pay FICA taxes if the deduction is done through the payroll of your employer.  If you opt to open an account and fund it on your own (ie not via payroll deduction) you will still get to deduct the income, but you will have to pay FICA taxes.  You can still open your own account at fidelity though, and move the funds over periodically.  That way you can take advantage of not paying FICA by going through payroll, and then still have your choice of what company you move the money to after that.

If this is not through your employer and you are just opening one on your own, then I definitely recommend fidelity.

pdxvandal

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Re: Health Equity for HSA?
« Reply #3 on: September 25, 2019, 03:15:53 PM »
I have Health Equity via my employer and have been generally satisfied. As the previous poster said, there is a $2k minimum cash investment, before you can invest in mutual funds.

I invest mostly in Vanguard institutional index fund (VIIIX) and about 20% in Vanguard Wellesley Income (VWIAX).

Whenever I leave my company, I'll certainly look into Fidelity and other low-cost HSAs. For now, the tax benefits are great and they offer Vanguard ... so not too bad!

TeacherStacking10s

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Re: Health Equity for HSA?
« Reply #4 on: September 26, 2019, 06:44:04 AM »
Thanks for the insight! Looks like Fidelity is the popular route to go!

frugalnacho

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Re: Health Equity for HSA?
« Reply #5 on: September 26, 2019, 07:24:50 AM »
I have Health Equity via my employer and have been generally satisfied. As the previous poster said, there is a $2k minimum cash investment, before you can invest in mutual funds.

I invest mostly in Vanguard institutional index fund (VIIIX) and about 20% in Vanguard Wellesley Income (VWIAX).

Whenever I leave my company, I'll certainly look into Fidelity and other low-cost HSAs. For now, the tax benefits are great and they offer Vanguard ... so not too bad!

You are not obligated to continue using your employers HSA for the duration of your employment.  You can open your own account at fidelity (or wherever you want) and transfer money over as often as you like.  Still use your employer HSA initially via payroll deduction so you don't have to pay FICA taxes like I mentioned previously, but after that you can move the money to your own account so you get the best of both worlds. 

turketron

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Re: Health Equity for HSA?
« Reply #6 on: September 26, 2019, 08:08:51 AM »
You are not obligated to continue using your employers HSA for the duration of your employment.  You can open your own account at fidelity (or wherever you want) and transfer money over as often as you like.  Still use your employer HSA initially via payroll deduction so you don't have to pay FICA taxes like I mentioned previously, but after that you can move the money to your own account so you get the best of both worlds.

Huh, this is good information. I'm using Health Equity this year for the first time and this wasn't mentioned in any of the documentation we were given. I'll have to look into this more later, but I found an article about it in their Help Center, here's what it says:

Quote
Sending partial funds of a health savings account (HSA) moves the amount requested directly from one custodian to another.

Please note the following:
  • You must own both accounts. You may not receive money from another individual's HSA.
  • Transfers of funds accumulated in previous years do not affect the current year's contribution limits.
  • There is no limit to the number of transfers you can make in a year.
  • Initiating a partial transfer will keep your HealthEquity HSA open. You must keep a balance of at least $25 in your HealthEquity account.

To move partial funds from HealthEquity to another custodian:
  • Complete the 'HSA partial transfer out request form' by clicking the 'Complete Online' button above.
  • Include the new custodianís name and information on the form.
  • HealthEquity will mail a check for the elected transfer balance to your new custodian within three weeks.

Sounds like a stupidly manual process so might be a bit tedious to do after each pay period but maybe once a quarter or something would make sense.

frugalnacho

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Re: Health Equity for HSA?
« Reply #7 on: September 26, 2019, 08:39:05 AM »
You are not obligated to continue using your employers HSA for the duration of your employment.  You can open your own account at fidelity (or wherever you want) and transfer money over as often as you like.  Still use your employer HSA initially via payroll deduction so you don't have to pay FICA taxes like I mentioned previously, but after that you can move the money to your own account so you get the best of both worlds.

Huh, this is good information. I'm using Health Equity this year for the first time and this wasn't mentioned in any of the documentation we were given. I'll have to look into this more later, but I found an article about it in their Help Center, here's what it says:

Quote
Sending partial funds of a health savings account (HSA) moves the amount requested directly from one custodian to another.

Please note the following:
  • You must own both accounts. You may not receive money from another individual's HSA.
  • Transfers of funds accumulated in previous years do not affect the current year's contribution limits.
  • There is no limit to the number of transfers you can make in a year.
  • Initiating a partial transfer will keep your HealthEquity HSA open. You must keep a balance of at least $25 in your HealthEquity account.

To move partial funds from HealthEquity to another custodian:
  • Complete the 'HSA partial transfer out request form' by clicking the 'Complete Online' button above.
  • Include the new custodianís name and information on the form.
  • HealthEquity will mail a check for the elected transfer balance to your new custodian within three weeks.

Sounds like a stupidly manual process so might be a bit tedious to do after each pay period but maybe once a quarter or something would make sense.

Yes probably not worth it to do every pay period, but a few times a year should be easy enough.  Especially once you fill out the paperwork and know the exact process it will be easier.  Honestly I didn't even bother with it for the first year I had the account, I just used Health Equity. 

terran

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Re: Health Equity for HSA?
« Reply #8 on: September 26, 2019, 08:58:31 AM »
If you're going to keep an employer sponsored plan for the FICA tax exemption and open a second better HSA (I do this) you may find that the employer HSA charges a fee to do a trustee to trustee transfer, so it might not be worth doing, but you can do as many as you want.

If you don't want to pay whatever transfer fees there might be you can do an indirect transfer by withdrawing from the employer HSA just like you would if you were reimbursing yourself for medical expenses (the source HSA doesn't need to know what the distribution is for as it won't change their reporting of the distribution) and then contribute to the new HSA as a rollover contribution. The destination HSA does need to know it's a rollover otherwise excess contributions will be reported. This is the only downside I've found with the Fidelity HSA as rollover contributions have to be made with a paper form and mailed in check (at least as of last spring). You can only make one indirect rollover per rolling 12 month period, so this is something you'll do once a year. Note that it's per rolling 12 month period, not per calendar year.

netloc

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Re: Health Equity for HSA?
« Reply #9 on: September 26, 2019, 12:36:21 PM »
I have a HE HSA through my employer, and recently opened a Fidelity HSA to do periodic transfers.

I submitted my first partial transfer request about a week ago, still waiting for it to go through, but there was no mention of a transfer fee.

What prompted action on my part was realizing HE charges a fee of 0.033% per month -- which equates to ~0.4% per year.

dcozad999

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Re: Health Equity for HSA?
« Reply #10 on: September 26, 2019, 02:11:30 PM »
I have a HE HSA through my employer, and recently opened a Fidelity HSA to do periodic transfers.

I submitted my first partial transfer request about a week ago, still waiting for it to go through, but there was no mention of a transfer fee.

What prompted action on my part was realizing HE charges a fee of 0.033% per month -- which equates to ~0.4% per year.


That was my issue with Health Equity.

Under my plan, VIIIX, and other Vanguard funds, had a little disclaimer on them that stated:

"This is a low cost fund that is not paid for by your plan sponsor. Investing in this fund will result in a monthly fee of 0.033% on the average value invested and will be charged to your cash balance."

So on top of the .05% at the time, that would have equated to a .447% annual fee.

Thankfully my company moved from Health Equity to Fidelity a couple of years back.

terran

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Re: Health Equity for HSA?
« Reply #11 on: September 26, 2019, 02:21:50 PM »
I submitted my first partial transfer request about a week ago, still waiting for it to go through, but there was no mention of a transfer fee.

They may not have one, but it's pretty common among HSA providers. Please report back for the benefit of others if you find they charge you one.

netloc

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Re: Health Equity for HSA?
« Reply #12 on: October 08, 2019, 10:33:27 AM »
I submitted my first partial transfer request about a week ago, still waiting for it to go through, but there was no mention of a transfer fee.

They may not have one, but it's pretty common among HSA providers. Please report back for the benefit of others if you find they charge you one.

My funds are finally at Fidelity as of today. No fee, unless it was somehow hidden from me. Full amount transferred and it does there is no fee associated with the transfer on the transaction history at HealthEquity.

seattlecyclone

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Re: Health Equity for HSA?
« Reply #13 on: October 08, 2019, 02:27:18 PM »
My previous employer used HealthEquity for their HSA provider. They had a deal where there were no extra HealthEquity fees charged to current employees, just the underlying fund's fees. For that reason I found HealthEquity to be just fine while I was still working there. Now that I left this summer and they're going to start charging the extra monthly fees I'll transfer to Fidelity eventually.

pdxvandal

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Re: Health Equity for HSA?
« Reply #14 on: October 08, 2019, 02:58:18 PM »
I just began the transfer of all assets from employer-run HE to Fidelity. Thank you for the recommendation ... I wouldn't have known without reading MMM forums!

I'll still be contributing to HE until I leave employment, then move everything to Fidelity HSA. The HE fees are quite ridiculous.

turketron

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Re: Health Equity for HSA?
« Reply #15 on: October 18, 2019, 01:57:02 PM »
@netloc  Do you know what address Fidelity requested they mail the check to? I'm having a hard time finding the correct address on Fidelity's site and when I chatted with their support team they told my they couldn't help and I'd have to call in to their HSA support team but I haven't had a chance, as they're only available during regular business hours, and (surprise) I've also been working during those hours.
« Last Edit: October 18, 2019, 02:07:04 PM by turketron »

netloc

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Re: Health Equity for HSA?
« Reply #16 on: November 13, 2019, 11:16:28 AM »
@netloc  Do you know what address Fidelity requested they mail the check to? I'm having a hard time finding the correct address on Fidelity's site and when I chatted with their support team they told my they couldn't help and I'd have to call in to their HSA support team but I haven't had a chance, as they're only available during regular business hours, and (surprise) I've also been working during those hours.

I apologize for the delay in response. The address I used was:

Fidelity Brokerage Services LLC
PO Box 770001
Cincinnati, OH 45277

turketron

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Re: Health Equity for HSA?
« Reply #17 on: November 13, 2019, 11:32:58 AM »
I apologize for the delay in response. The address I used was:

Fidelity Brokerage Services LLC
PO Box 770001
Cincinnati, OH 45277

No worries, I appreciate the reply! I called Fidelity and I actually ended up initiating it through them rather than HealthEquity, and they sent the transfer request to HealthEquity to complete. It's still being processed but should be complete in the next few days.

nickybecky1

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Re: Health Equity for HSA?
« Reply #18 on: December 27, 2019, 08:51:26 AM »
Did requesting it through Fidelity rather than through Health Equity result in a transfer fee?

I'm about to do this for the first time! I didn't realize the .0033 was per month although I did have a sense it was taking a bigger chunk than I would have expected!

turketron

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Re: Health Equity for HSA?
« Reply #19 on: December 27, 2019, 02:18:39 PM »
Did requesting it through Fidelity rather than through Health Equity result in a transfer fee?

I'm about to do this for the first time! I didn't realize the .0033 was per month although I did have a sense it was taking a bigger chunk than I would have expected!

No transfer fees that I can see, neither from Fidelity nor HealthEquity.

nickybecky1

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Re: Health Equity for HSA?
« Reply #20 on: December 28, 2019, 04:02:47 PM »
Thanks! Did you get a medallion signature? The form says you may need one and I am hoping I donít but also donít feel much like calling.

turketron

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Re: Health Equity for HSA?
« Reply #21 on: December 29, 2019, 09:20:39 AM »
No, I saw that it was listed on the form, but it wasn't mentioned in any of the steps when I was going through the process, and I had spoken to a rep from Fidelity over the phone with some other questions, and she never mentioned it either. So I didn't get one and it was processed just fine!

doneby35

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Re: Health Equity for HSA?
« Reply #22 on: December 29, 2019, 04:35:05 PM »
Does a rollover from healthequity to fidelity require selling the HSA invested funds and paying taxes? and then send the funds to fidelity and buy/invest at today's market rate?

seattlecyclone

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Re: Health Equity for HSA?
« Reply #23 on: December 29, 2019, 04:42:57 PM »
Does a rollover from healthequity to fidelity require selling the HSA invested funds and paying taxes? and then send the funds to fidelity and buy/invest at today's market rate?

There's no (federal) tax involved on stock sales within an HSA. You would generally need to liquidate all stocks in the old account, at which point you would transfer cash to the new account and buy new investments there.