Author Topic: HSA minimum cash balance  (Read 1371 times)

doneby35

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HSA minimum cash balance
« on: October 10, 2017, 02:58:57 PM »
I'm just curious, what happens to the minimum cash balance in an HSA after a few years of inflation?
I have to have 2k in my HSA account as a minimum cash balance and the rest is all transferred to an index fund, but I was just thinking the 2k is just going to sit there and eventually be worth much less. Unless I'm missing something? Any workarounds?

GetItRight

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Re: HSA minimum cash balance
« Reply #1 on: October 10, 2017, 06:41:53 PM »
Find a better bank? Really there's not much you can do as they all (that I've seen), require some minimum cash balance. Mine pays some tiny percent on the cash portion, that's probably as good as you'll get.

doneby35

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Re: HSA minimum cash balance
« Reply #2 on: October 10, 2017, 07:56:41 PM »
That's a shame, such a waste of 2k that could be put to good use and by the time I retire, won't be worth much.
Unfortunately i can't change banks since it's through my employer and they contribute to it as well. Oh well...

Peony

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Re: HSA minimum cash balance
« Reply #3 on: October 10, 2017, 08:24:28 PM »
My HSA is with Health Savings Administrators and there is no such requirement. My HSA is not through an employer.

DS

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Re: HSA minimum cash balance
« Reply #4 on: October 11, 2017, 08:42:00 AM »
Once a year, you can roll it over. When you roll it over, you receive the funds to your checking account and then send a check to the new bank. You have 60 days to complete this. The next 1 year clock starts at the time of the rollover, not based on a calendar year.

Search for "HSA rollover" online and talk with the current provider to make sure you follow the process correctly.

You would still keep the employer-setup account open for future deferrals/match, but just once a year roll funds over to an account of your choosing. You can find one with either $1,000 or less minimum balance.

Hope this helps.

doneby35

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Re: HSA minimum cash balance
« Reply #5 on: October 11, 2017, 10:50:48 AM »
interesting. Does that mean that i will be selling the funds in the investment account and pay taxes on that, then rollover to another HSA provider and invest the funds again?
I'll definitely do some research on it.

Acastus

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Re: HSA minimum cash balance
« Reply #6 on: October 11, 2017, 11:03:21 AM »
This is similar to where you should keep your emergency fund. If you plan to use the HSA, you need some cash to pay bills. If you use it strictly as an investment vehicle, move as much as possible to long term investing. My fund forces me to keep $1k in cash. It is just the cost of doing business.

Heroes821

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Re: HSA minimum cash balance
« Reply #7 on: October 11, 2017, 02:36:38 PM »
I had through work Discovery Benefits HSA and then I moved to their individual HSA account.  They have a minimum cash balance of $1000, which from several posts here seems to be the lowest I've heard of.  Sadly the individual account has a $3 a month fee. But they offer VFINX in their investment section and a few other Vanguard indexes.

So Cash balance per year to not mess with it needs to be $1036.  Also with $7k in VFINX I appear to get hit with a $4 ish dollar fee every quarter when dividends hit, I'm sure that is a percentage though.

Either way HSA vehicle is so good you still end up ahead.