Opening an HSA for the first time, seeking answers and advice.

[a_divisive_zero]

Hello there, long-time lurker and now a first-time poster. I decided I needed to tap into the collective intelligence here for my HSA questions.

The custodian for my employer HSA is a very small bank in the same town I work in. My HR department has stated that HSA pre-tax contributions must be deposited into my company's bank of choice. The maintenance fee is $1.00 a month (doesn't go away regardless of balance amount) and the interest rate is 0.2%. It is a straight savings account with no investment options.

My understanding is that there is no limit on the number of HSA's one can have. I am a 33 year-old man in good health and do not require much money for health-care reasons (so far). So you can guess that having my money sitting in an account earning 0.2% interest while being dinged a $1.00 a month is a no-go. My goal would be to plow enough pre-tax money into it so that the interest would eventually pay the monthly fee. Any amount beyond that I'd like to put to work.
   
1. Has anybody opened up another HSA with investment options in tandem with their employer HSA?
2. If so, do you just transfer from one account to the other on a regular basis or do rollovers? What is the difference between a transfer and a rollover anyway?
3. Has anybody had negative experiences with an HSA? Things they wished they had done differently or avoided?

Thanks for the help!

[nanu]

*posting to follow*

[mokosai]

I just finished looking into this. 

My HSA custodian charges $25 to transfer all or part of the balance anywhere, so my solution is to tell my employer to stop taking pre-tax contributions out of my paycheck.  Instead, I will be making post-tax contributions to the HSA of my choice, then getting those taxes refunded at tax time each year.

I decided to go with "HealthSavings Administrators", by the way, because they offer Vanguard funds.

[J'onn J'onzz]

This is also my first year of having an HSA. My HSA contributions are taken out pre-fica so I would not want to miss out on that tax savings by making post tax contributions at another administrator. I am actually not sure if my employer sponsored admin charges a fee to transfer out but if they do I will probably just let mine build up there and transfers out once a year. If the fee is comparable to the $25 mokosai is being changed I will still come out better to pay the fee instead of the FICA.

[seattlecyclone]

I just finished looking into this. 

My HSA custodian charges $25 to transfer all or part of the balance anywhere, so my solution is to tell my employer to stop taking pre-tax contributions out of my paycheck.  Instead, I will be making post-tax contributions to the HSA of my choice, then getting those taxes refunded at tax time each year.

I decided to go with "HealthSavings Administrators", by the way, because they offer Vanguard funds.

You may be better off sticking with the payroll contributions and paying the $25 once a year to transfer the balance elsewhere. These payroll contributions are typically made pre-FICA. Assuming your salary is below the social security tax cutoff, you could save about $250 in payroll taxes for a self-only HSA or about $500 for a family plan. You can't get this money back at tax time if you make contributions elsewhere.

[MDM]

See http://whitecoatinvestor.com/choosing-an-hsa-provider/ for a good review of HSA plans offered by the providers listed below. 

The article generally recommends
     HSA Bank or Fidelity HSA

It also covers
     HSA Administrators
     Alliant Credit Union
     Stanford Federal Credit Union
     Wells Fargo
     Adirondack Trust
     Lake Michigan Credit Union
     Bank of the Sierra

Any of the above might be "best" for someone, depending on one's specific plans for an HSA.

Also, the article is a couple of years old so things may have changed.  If anyone knows of a material change, let us know.