newb expense ratio question

[FireAnt]

My employer switched to a new HSA management company and over the past few months I've noticed they've taken out fees each time there is an investment transfer. I inquired about the fees and this is the email I got.

"As for the fee the bank will charge a custodia management fee of .0625% per quarter or .25% per annum on investments and rebate or credit any compensation received from mutual funds for shareholder and recordkeeping services to the account holder."

So just making sure I am understanding correctly, the expense for investing my HSA dollars is .25% plus .04% for the fund (VFIAX). Such a newb question but I want to make sure I'm understanding correctly.

[nereo]

That's my understanding of that email.

Sucks for sure, but in the grand scheme of things a 0.29% expense ratio still makes investing in your HSA your highest priority (largely because it's pre-tax/post-tax).

[FireAnt]

I also see all these $1 fees and it makes it more confusing. I emailed them to clarify but was wanting unbiased input.

[Stimpy]

Yup, your getting the same screwing I am...  Though looks like a different company.

So yes, those fees are exactly what you think they are.  They take your total in on that day (3/25 for the picture) and multiply it by .0625% to determine the fee, the dollars you seeing are how they are saying this is a cash reciept.  Personally I would just ignore those lines.  They are more for accounting then actual transaction.  Or at least in my mind that's how I read it.

[Tyler durden]

I would hope like most things in Finance as HSA's get more prevalent and competition goes up these fees go down or go away entirely.

[terran]

Yes, you've got it right, it sounds like you have a 0.29% overall expense ratio for that investment. I would say those $1 fees are an additional fee. Probably every time you transfer to the investment account or make a new purchase in the investment account. You might consider moving to Fidelity which has an excellent HSA. You'll probably want to continue to contribute to the workplace HSA for the FICA tax deduction that you're likely getting (the income tax deduction is the same either way), and then transfer it out.

There's probably a transfer fee, so instead you'll want to take a withdrawal just like you would to reimburse yourself for medical expenses and then contribute to fidelity as a rollover contribution. You're limited to doing this once per rolling 12 month period (not per calendar year), so you'll end up with a years worth of contributions sitting uninvested at the end of the year. This is what I do to avoid these kinds of fees at a workplace HSA. 

[FireAnt]

Yes, you've got it right, it sounds like you have a 0.29% overall expense ratio for that investment. I would say those $1 fees are an additional fee. Probably every time you transfer to the investment account or make a new purchase in the investment account. You might consider moving to Fidelity which has an excellent HSA. You'll probably want to continue to contribute to the workplace HSA for the FICA tax deduction that you're likely getting (the income tax deduction is the same either way), and then transfer it out.

There's probably a transfer fee, so instead you'll want to take a withdrawal just like you would to reimburse yourself for medical expenses and then contribute to fidelity as a rollover contribution. You're limited to doing this once per rolling 12 month period (not per calendar year), so you'll end up with a years worth of contributions sitting uninvested at the end of the year. This is what I do to avoid these kinds of fees at a workplace HSA.

I'll have to look on how to transfer the money to Fidelity or another company. This all happens automatically with HR along with the HSA company they use.

I got this response this afternoon when asking for clarification, which is a bit concerning to read. I actually don't even understand what they're saying... and the grammar, ugh.

"Unfortunately, as they are individually owned and we personally do not have HSAs I cannot assist with how you have it set up. I do know for investments the bank will charge a custodial management fee of .0625% per quarter or .25% per annum on investments and rebate or credit any compensation received from mutual funds

I’m not sure if the website provides guidence through the website, otherswise you may want to contact a fincial advisor."

[MustacheAndaHalf]

@FireAnt - Does your employer match your HSA contributions?

If not, you could stop contributing at work, and open an HSA elsewhere.
https://blog.gravie.com/employer-hsas-arent-the-only-option-for-employees

I've been meaning to transfer my HSA to Fidelity for some time.  They have low or no fees (forgot which), and let you invest the entire balance.  Keep in mind when you compare HSAs that "minimum cash balance" is money you can't invest.  I actually paid fees (at HSA Bank) to be able to invest, since the higher returns offset the fees.  At some point I plan to switch to a Fidelity HSA.
https://www.fidelity.com/go/hsa/why-hsa

[FireAnt]

@FireAnt - Does your employer match your HSA contributions?

If not, you could stop contributing at work, and open an HSA elsewhere.
https://blog.gravie.com/employer-hsas-arent-the-only-option-for-employees

I've been meaning to transfer my HSA to Fidelity for some time.  They have low or no fees (forgot which), and let you invest the entire balance.  Keep in mind when you compare HSAs that "minimum cash balance" is money you can't invest.  I actually paid fees (at HSA Bank) to be able to invest, since the higher returns offset the fees.  At some point I plan to switch to a Fidelity HSA.
https://www.fidelity.com/go/hsa/why-hsa

They don't match, but they do contribute about $75/month.