The HSA dilemma after changing jobs

[spaniard999]

Happy new year fellow mustachians!

Question 1:
I recently changed jobs and I have an HSA with my previous job with some money on it.
The old HSA is in "HealthEquity" and the new one for the new company is in "Further" (Hello Further?).

I have been reading that some HSA providers might charge you to keep that account open if you are no longer enrolled in a HDHP (High Deduct Health Plan) through the company.
I have to say that I read the conditions of the admin fees (often paid by the employer) and it states that if you change jobs and your employer was paying them, you might have to pay them now.
It also says that if you keep $2500 in cash you might avoid the fee and any change on this fees should be notified -> I have not been notified of any change yet.

I also noticed that the new HSA provider charges me $1 per month for the account.

So my question is. What makes more sense: To leave the old HSA account the way it is? Or to roll it over to the new one? Or to roll it over to another one (Vanguard/Fidelity)?
Maybe there is even another option that I don't know of and you guys can add!


Question 2:
Health Equity forces me to have 2k in cash and then I can invest the rest. Is there any way around this now that I don't have a HDHP through my employer in that account?
I hate to have cash sitting and not working for me.

[MissNancyPryor]

I had this exact problem when I changed jobs and then ultimately FIREd in 2019. 

I moved everything into Fidelity which has a zero-fee HSA.  Zero transfer fees, zero administrative fees, zero requirement to carry some dopey cash balance.  It is an ideal solution, found through this forum (love that MMM collective knowledge!).  There are even some Fidelity zero-expense funds you can invest in but I went for the VTSAX equivalent.

I plowed it all into FSKAX, made my 2020 full contribution as the markets sank in 2020, and lived happily ever after. 

I am not sure if this handles your Question #2 since I have an HDHP post-FIRE so I can continue to invest that HSA contribution.  The Collective can chime in.
 

[seattlecyclone]

Question 2:
Health Equity forces me to have 2k in cash and then I can invest the rest. Is there any way around this now that I don't have a HDHP through my employer in that account?
I hate to have cash sitting and not working for me.

This is HealthEquity specific. My former employer used them for their HSA. They did start charging a monthly fee after I left. I however withdrew my cash balance to pay for some medical bills, and noticed two things:
1) They didn't force me to liquidate investments to keep the minimum cash buffer. They'll apparently stop you from investing your cash if you have less than the required amount, but they won't make you sell what you've already invested.
2) Once my cash balance went down to zero, the monthly fees also stopped.

I was all set to roll over to Fidelity, but once I noticed these two things it was less of a high priority and so I haven't gotten around to it yet.

[MoseyingAlong]

Question 2:
Health Equity forces me to have 2k in cash and then I can invest the rest. Is there any way around this now that I don't have a HDHP through my employer in that account?
I hate to have cash sitting and not working for me.

I changed to a plan at Health Equity that does not require a cash cushion and had good investment options. According to my statements, when the cash balance got to zero, it just started building a small balance; they did not sell any of my investments.
It was (maybe still is) called Investor Choice.

[spaniard999]

Thanks for all the input.

After all your comments I feel inclined to the Fidelity HSA approach.
I don't want to rollover from Health Equity to Further because the latest has higher fees and worst investment options.

I went through the Health Equity website but I didn't find anything related to a transfer or rollover. How hard would it be? I guess they have to sell all the investments, then do the transfer and rebuy after the transfer, at the new HSA, right?

And then last question:
Lets say I transfer from old HSA to a new Fidelity HSA. Then I would still have my new company HSA provider (Further), which puts $60 a month. Can I contribute the rest to $3600 ($3600 - $60*12 = $2880) to the Fidelity HSA instead of the new company HSA? I'm thinking that the new company HSA provider (Further) fees are higher than the Fidelity HSA.

[secondcor521]

And then last question:
Lets say I transfer from old HSA to a new Fidelity HSA. Then I would still have my new company HSA provider (Further), which puts $60 a month. Can I contribute the rest to $3600 ($3600 - $60*12 = $2880) to the Fidelity HSA instead of the new company HSA? I'm thinking that the new company HSA provider (Further) fees are higher than the Fidelity HSA.

Yep, that's fine.  Just make sure you don't go over the annual limit.  When you do your taxes, combine both the HSA contribution amounts together and put the total on Form 8889.

[terran]

Yes, you can contribute to whichever HSA you like, but with payroll deducted contributions you often don't pay FICA taxes on the contribution, so that might be a vote in favor of contributed to the HSA your employer works with.

If health equity wants to charge you a transfer fee (which is pretty common) you might consider doing an indirect rollover. You're only allowed one of these per rolling 12 month period (not per calendar year), so be careful about the time if you do another one in the future to get money out of your employer HSA.

[ohsnap]

...

If health equity wants to charge you a transfer fee (which is pretty common) you might consider doing an indirect rollover. You're only allowed one of these per rolling 12 month period (not per calendar year), so be careful about the time if you do another one in the future to get money out of your employer HSA.

We'd like do a once-a-year rollover to a no-fee HSA (my husband's employer-sponsored HSA charges fees, ugh) but what's held us back I the market timing aspect of it.  He'd have to liquidate his assets & put them in cash to do this.  I'm terrified that we'd sell on a market downturn and buy on an upturn, which would end put us in a much worse situation than continuing to pay the annoying but small fees.