The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: NextTime on September 24, 2015, 12:52:19 PM
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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.
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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.
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^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 (http://www.hsabank.com/hsabank/members) and SelectAccount (https://www.selectaccount.com/products/hsa/) 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.