HSA Questions

[NextTime]

Hi all. Just wanted to make sure I am understanding my HSA investments correctly.

My HSA is through my employer with a company called Health Equity. I currently have a little over $6,000 and was going to invest about $5k.

It has some Vanguard Index funds so I was going to split it between VIIIX (.02%) and VBMPX (.05%). As I attempted to set this up, a pop up informs me:

This is a low cost fund that is not paid for by your plan sponsor. Investing in this fund will result in a monthly fee of 0.033% on the average value invested and will be charged to your cash balance.

That means the actual fees would be .4% correct? Seems pretty high.

It's a little frustrating and telling that my company would pick up the fees for the active funds but not the passive funds.

[seattlecyclone]

I doubt your employer is picking up the fees for the active funds either. This is the same fee structure HealthEquity has for individual investors: the index funds have an extra 0.40% tacked on in administrative fees, and the active funds kick back enough to HealthEquity that they don't need to charge extra.

[MDM]

^This.

Note that you can move the funds out of Health Equity into another HSA provider if you wish. 

If you happen to have $250K invested with Fidelity because they administered your previous employer's 401k, you can have an HSA with them for $0/year and use their Spartan funds and no-fee ETFs to your heart's content.

Otherwise, HSA Bank and SelectAccount are a couple of good options if you want the HSA primarily for investments.

See
http://thefinancebuff.com/best-hsa-provider-for-investing-hsa-money.html and http://20somethingfinance.com/best-hsa-account/ for more discussion.