Author Topic: HSA fees  (Read 5868 times)

POINTS of ER

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HSA fees
« on: August 29, 2013, 02:51:35 PM »
I'm getting a High Deductible Health Plan eligible with a HSA next month. For a new HSA contributor, should I just get a HSA fixed rate like Keypoint Credit Union HSA which is 2.23% / 2.25% (APR/APY) with low fees or an account like HSA Bank supplemented with an investor account but has high fees.

In my research I understand that HSA Bank has two key fees: one for the regular HSA and one for the investment account. Both can be waived if you have a balance over $5,000. If not then you'll have a monthly fee of $5.50 if you have both the investment and HSA. HSA alone, you'll have a $2.50 monthly fee.

Keypoint has an enrollment fee of $10 and a monthly fee of $2 but it's easily waived if you have a balance more than $25.

Another option I was considering was rolling over my HSA from Keypoint to HSA Bank after I reach the $5,000 threshold.

Your thoughts?

icefr

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Re: HSA fees
« Reply #1 on: August 29, 2013, 10:37:32 PM »
Is the plan through your employer? If so, they might have an HSA custodian they can do payroll contributions to. That's what mine does.

If not, I would just pick one like a credit union with no fees, especially while you have a low balance building it up.

POINTS of ER

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Re: HSA fees
« Reply #2 on: August 30, 2013, 01:27:43 AM »
Is the plan through your employer? If so, they might have an HSA custodian they can do payroll contributions to. That's what mine does.

If not, I would just pick one like a credit union with no fees, especially while you have a low balance building it up.

My employer does have a HSA plan affiliated with Optumbank but it's almost identical in fees as HSA bank. My employer does not require me to get an HSA through OptumBank that is why I was researching my options.

What are the benefits of payroll contributions than my own contributions? From my understanding my own contributions will still be tax-deductible.

icefr

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Re: HSA fees
« Reply #3 on: August 30, 2013, 10:25:53 PM »
My employer does have a HSA plan affiliated with Optumbank but it's almost identical in fees as HSA bank. My employer does not require me to get an HSA through OptumBank that is why I was researching my options.

What are the benefits of payroll contributions than my own contributions? From my understanding my own contributions will still be tax-deductible.

Payroll contributions are not subject to Social Security (6.2%) and Medicare (1.45%) taxes. You can always transfer from your employer's HSA to a different one once a year or so, but saving on those taxes could be worth it. And you get the immediate tax break.

jpo

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Re: HSA fees
« Reply #4 on: August 31, 2013, 09:08:26 AM »
I have HSA Bank. Not sure if it's just my employer or not but I have to leave $1000 uninvested and to invest had to putat least $3000. So total balance before investing was $4000.

CorpRaider

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Re: HSA fees
« Reply #5 on: September 05, 2013, 08:45:27 AM »
Yeah, that must be just your employer because I was able to start investing through the TD Ameritrade option well before that.

jpo

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Re: HSA fees
« Reply #6 on: September 05, 2013, 09:19:34 AM »
My HSA Bank investment option is through SaveDaily. Wish it was TD Ameritrade, that's where my other accounts are.

It may just vary based on employer.

Mayan

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Re: HSA fees
« Reply #7 on: September 05, 2013, 12:41:54 PM »
Payroll contributions are not subject to Social Security (6.2%) and Medicare (1.45%) taxes. You can always transfer from your employer's HSA to a different one once a year or so, but saving on those taxes could be worth it. And you get the immediate tax break.


I've recently started using a HDHP + HSA through my employer and want to clarify (if this should be moved to a separate thread, just let me know!).  Are you saying that contributions directly to my HSA would be tax deductible for federal income tax purposes but still be subject to Medicare/FICA, while elective payroll deductions to HSA would be exempt from income tax AND Medicare/FICA? 

icefr

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Re: HSA fees
« Reply #8 on: September 05, 2013, 11:53:37 PM »
Payroll contributions are not subject to Social Security (6.2%) and Medicare (1.45%) taxes. You can always transfer from your employer's HSA to a different one once a year or so, but saving on those taxes could be worth it. And you get the immediate tax break.


I've recently started using a HDHP + HSA through my employer and want to clarify (if this should be moved to a separate thread, just let me know!).  Are you saying that contributions directly to my HSA would be tax deductible for federal income tax purposes but still be subject to Medicare/FICA, while elective payroll deductions to HSA would be exempt from income tax AND Medicare/FICA?

Yes. If your total income is above the Social Security tax maximum, you won't really see that break - it just delays it. But you still save on the Medicare tax AND see the federal income tax savings upfront on your paycheck.

Mississippi Mudstache

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Re: HSA fees
« Reply #9 on: September 06, 2013, 09:14:03 PM »
Yeah, that must be just your employer because I was able to start investing through the TD Ameritrade option well before that.

Same here. I just signed up for the TD Ameritrade option this week. Just out of curiosity, how are you treating your HSA savings? Do you look at it as a retirement account?

ny.er

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Re: HSA fees
« Reply #10 on: September 06, 2013, 09:37:29 PM »
Yeah, that must be just your employer because I was able to start investing through the TD Ameritrade option well before that.

Same here. I just signed up for the TD Ameritrade option this week. Just out of curiosity, how are you treating your HSA savings? Do you look at it as a retirement account?

I see our HSA as part emergency, part savings. If you have anything left in there at age 65, you can use it for non-medical expenses.

Mississippi Mudstache

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Re: HSA fees
« Reply #11 on: September 06, 2013, 09:48:28 PM »
Yeah, that must be just your employer because I was able to start investing through the TD Ameritrade option well before that.

Same here. I just signed up for the TD Ameritrade option this week. Just out of curiosity, how are you treating your HSA savings? Do you look at it as a retirement account?

I see our HSA as part emergency, part savings. If you have anything left in there at age 65, you can use it for non-medical expenses.

That is pretty much how I'm viewing it. I've been meticulously tracking every medical expense since we decided to start paying them out of pocket instead of from the HSA a couple of months ago. We have a son who has and will continue to have very high medical costs for the rest of his life, so our HSA will probably be a big factor in our FI scheme. It's also nice to know that it can serve as our emergency fund as well, since the funds can be withdrawn at any time.