Author Topic: HSA fees exhorbitant?  (Read 12204 times)

DrF

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HSA fees exhorbitant?
« on: October 21, 2014, 12:58:51 PM »
I am going to sign up for my employer HDHP and HSA. My employer funds $1100 into my HSA automatically (their HSA provider is HealthEquity, http://healthequity.com/ed/hsalearn).

At HealthEquity I have to keep the first $2000 in their cash/savings account that pays 0.05% APY. I am definitely going to open this to get the contribution, but I am thinking of opening a different HSA account through another provider.  I'm hoping to get a few recommendations.
I can invest at HealthEquity with these options (http://healthequity.com/ed/resources/docs/HSA_invest.pdf), but I get charged some serious fees ($0.33 per $1000 per month) if I want to invest in the Vanguard funds. I don't see any other fees associated with the HealthEquity account.

Wants in the second HSA account
- immediately invest the funds I deposit
- low/no costs/fees for low balance (until I build it up)
- broad investment opportunities (low fee again)

Some options I've come across are HSAbank.com or http://www.hsaadministrators.info/ (direct link from Vanguard - so you know it HAS to be SHOULD be legit!)

At HSAbank they charge a $2.50 monthly fee if you have less than $5000. There is also a $3.00 a month 'investment' fee, not sure if this is if you choose to have your direct deposit automatically invested (this is also waived if you have > $5000). Investing is through TDAmeritrade. Not sure what other fees there are for trading through TD platform.

HSA administrators charge an annual $45 fee (never waived). They also have a quarterly mutual fund custodial fee ($0.80 per $1000, with a max of $16) on top of the fund management fee (standard Vanguard fee).

Here is a link from Bogleheads talking about the different options. http://www.bogleheads.org/forum/viewtopic.php?t=33831
But they don't go into all the fees associated.

Any personal experience with HealthEquity, HSAbank, or HSA administrators is greatly appreciated.

DrFunk

P.S. Also posted this in the 'Ask a Mustachian' forum (http://forum.mrmoneymustache.com/ask-a-mustachian/what-is-the-best-health-savings-account-(hsa)/), but may be relevant for Investor Alley

FOBStash

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Re: HSA fees exhorbitant?
« Reply #1 on: January 18, 2015, 11:33:10 AM »
DaFunk did you get to a path here? I just met our minimum at HealthEquity and quite frankly I'm overwhelmed on how to invest...
almost FI....so much less stress!

wtjbatman

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Re: HSA fees exhorbitant?
« Reply #2 on: January 18, 2015, 05:44:59 PM »
DaFunk did you get to a path here? I just met our minimum at HealthEquity and quite frankly I'm overwhelmed on how to invest...

I don't know what your planned asset allocation is, but assuming your options are the same as the ones listed in the PDF that DrFunk posted, I suggest accessing the "Investor Choice" funds and investing in the Vanguard index funds available. Follow your asset allocation (you have one, right?) and you'll know exactly what % to put in what funds.

milesdividendmd

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Re: HSA fees exhorbitant?
« Reply #3 on: January 18, 2015, 06:16:52 PM »
I have some relevant experience here.

My employer has HealthEquity as its HSA provider and it is a real dog!

Fortunately HSAs are generally portable, so last year I transfered mine to HSA bank, which is decent.  It's about 5$ amonth in fees, but you can be fully invested in fee free ETFs through TD ameritrade.  I wrote about my experience transfering my funds here.  http://www.milesdividendmd.com/portable-bliss/.  (hint: You only have to keep 25$ in your HealthEquity account to avoid an account closure fee upon transferring your funds out.)

Once you get to over 10K in your HSA, I think that this is the best option:

http://www.hsasearch.com/hsa_providers/selectaccount/#fees

The account fee is only 1 buck a month, and you have to keep 1000 in their savings, but schwab has by far the most fee free ETF options, with no minimum holding times.  (I will be transferring both of my HSA accounts here after pre-funding this year.

Good luck, and by all means move your money!


I can teach you to play the miles game in 30 days.  http://www.travelmiles101.com/travel-rewards-course-registration.  (A free course by mustachians for mustachians)

FOBStash

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Re: HSA fees exhorbitant?
« Reply #4 on: January 18, 2015, 10:17:07 PM »
Thank you!
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DavidAnnArbor

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Re: HSA fees exhorbitant?
« Reply #5 on: January 19, 2015, 08:43:05 AM »
Eli Lilly Federal Credit Union:
No fee to open up the hsa - There is a $5 one time membership fee.
$3 monthly fee if your balance is lower than $2500
Annual percentage yield is 1% for the HSA.
You can transfer money from the HSA to TD Ameritrade but there is a $24 for each transfer to and from Eli Lilly to TD Ameritrade.
Need a minimum of $2500 in the HSA with Eli Lilly, above which, you can transfer money over to TD Ameritrade.
At TD Ameritrade you can get Vanguard exchange traded funds at no commission cost. Also, the TD Ameritrade account has no fees associated with it.

United Bank of Michigan:
No fee set up. No monthly fee with $200 min balance.
Latest statement says I'm earning 2.24% APY, but this is down from 3.25% so the rates may have changed.
No fee to close this account or to transfer funds out of this HSA into another HSA account.
There is no brokerage account option with an HSA account.

You're allowed to have more than one HSA custodian, or bank.

VioletVixen

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Re: HSA fees exhorbitant?
« Reply #6 on: January 31, 2015, 03:02:40 PM »
So, are the .33/month/$1000 fees in Health Equity really that horrible if other HSAs also charge $5+ in monthly fees? Is it a bad strategy in terms of fees to invest in HSAs vs low ER funds in IRAs and 403b? In other words, I should put most of my savings toward the non-HSA accounts?

milesdividendmd

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Re: HSA fees exhorbitant?
« Reply #7 on: February 01, 2015, 11:40:41 AM »
HSAs are the most tax advantages accounts.  It's the only single account where you can put in pretax money (like in a 401(k) and withdraw with untaxed distributions (like in a roth 401(k).

So if you are in a high tax bracket, even with the annoying fees, they are worth it.
I can teach you to play the miles game in 30 days.  http://www.travelmiles101.com/travel-rewards-course-registration.  (A free course by mustachians for mustachians)

VioletVixen

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Re: HSA fees exhorbitant?
« Reply #8 on: February 01, 2015, 01:51:12 PM »
What if you're in the 15% bracket? Is it still worth maxing out every year? If I can't max out all of my accounts (Traditional 403b/Traditional IRA/HSA), which is best to concentrate on?

milesdividendmd

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Re: HSA fees exhorbitant?
« Reply #9 on: February 02, 2015, 08:07:49 PM »
Less so, because under the current tax code you will never pay capital gains in taxable accounts.

You will however still lower your current tax burden, both in terms of income and FICA taxes.
I can teach you to play the miles game in 30 days.  http://www.travelmiles101.com/travel-rewards-course-registration.  (A free course by mustachians for mustachians)

MoneyRx

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Re: HSA fees exhorbitant?
« Reply #10 on: February 05, 2015, 01:51:57 PM »
HSAs are pretty fee-happy. My emplyer uses mybenefitwallet. I haven't seen it listed on any of the forums or lists of best HSAs but it seems to beat everything else out there on the lists.

Pros:
1. $1000 minimum balance to avoid monthly administration fee, can invest everything over this amount. This seems to be the lowest I've seen, as others seem to be $2000-$5000.
2. $2.90/month investment fee, regardless of amount invested. At first I thought this was high, but seems to be as good or better than all others, especially if you build up your balance (One above said $.33/$1k, this would be exceeded at $8.7k invested).
3. No fees for moving money in and out of funds, buying/selling funds, or moving between HSA spendable account and investment account
4. VTSAX available as investment option

Cons:
1. There is an initiation fee, I can't remember how much because my employer paid it. I couldn't find it with a quick search on their website either. I think it was $20-$30.

IndexInvestorHSA

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Re: HSA fees exhorbitant?
« Reply #11 on: January 13, 2016, 04:34:40 PM »
Full disclosure I work for HealthEquity. 

I wanted to let everyone know on the thread that we just released a new individual product (not related to an employer) called Index Investor HSA™, a health savings account for the Vanguard community.  Index Investor HSA features 17 Vanguard funds covering 10 asset classes. There are no minimum investment requirements or trading fees.  It has the lowest average operating expense ratio and lowest HSA administration fees for an all-Vanguard HSA fund lineup. Index Investor is the first HSA to offer Institutional Shares, Vanguard's most cost-efficient fund class, to individual investors. The average fund expense for non-Target date funds (0.09) for target date funds (0.17). Account administration fee is only $36 a year. Investment fees are only 2bps/mo or .24%/yr on moneys invested. For a limited time, new HealthEquity members receive free first-year administration with the rollover or transfer of at least $1,000 from another HSA custodian within 90 days of opening an Index Investor account. If you want to check it out go to http://healthequity.com/indexinvestor/

FOBStash

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Re: HSA fees exhorbitant?
« Reply #12 on: January 13, 2016, 10:42:34 PM »
^^thanks will check out tomorrow.
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seattlecyclone

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Re: HSA fees exhorbitant?
« Reply #13 on: January 13, 2016, 11:15:51 PM »
I wish Vanguard would just get in the HSA game directly. They're able to offer IRAs with no administrative fees beyond the underlying fund expense ratios; why need an HSA be any different?
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The Roth IRA was named after William Roth, who represented Delaware in the US senate from 1971-2001. "Roth" is a name, not an acronym. There's no need to capitalize the final three letters.