How to open an HSA?

[lilybluerose]

Hi! I have been doing some googling, but am hitting some walls. I am self employed and pay for my own health insurance. In 2023 I am switching to a plan that is an HSA eligible one ( Highmark Inc.
my Direct Blue EPO Gold 1700 HSA)

I have no idea how to go about opening the HSA myself, do you guys have any good learning resources for this please? Thank you so much

edit to ask- Do I have to use the HSA for any procedures? Like lets say I get blood work done. With this insurance plan, blood work costs $20 . How does this work? Could I just pay for the labs myself, and continue to contribute to the HSA, or is it required that the HSA goes towards that? I am so confused lol.

I read this ( Since there is no rule stating that you must use your HSA to directly pay for medical expenses or that you must withdraw money from your HSA within a certain amount of time after paying for a medical expense, you can just take out the money whenever you want.

As long as the qualified medical expense occurred after the HSA was opened, you can withdraw money from the HSA at any time after incurring the expense to reimburse yourself.) but just wanted to make sure I am undesrtanding correctly. That yes I can just pay the $20 fee through insurance, and then still take the HSA money out later, with receipts even if I already paid for it?

I guess on what I am confused by, is when they say "pay out of pocket" that means after insurance right? Not, paying out of pocket not using insurance at all?

[EvenSteven]

You first need to pick an HSA provider. There is one clear choice currently on the market that is better than the others: Fidelity.

https://www.fidelity.com/go/hsa/investing-hsa-your-way

Click the button at the bottom that says: Open a Fidelity HSA

[lilybluerose]

thanks so much!

[bacchi]

edit to ask- Do I have to use the HSA for any procedures? Like lets say I get blood work done. With this insurance plan, blood work costs $20 . How does this work? Could I just pay for the labs myself, and continue to contribute to the HSA, or is it required that the HSA goes towards that? I am so confused lol

No, you don't have to use it.

You can pay for it with a credit card, keep the receipt, and reimburse yourself immediately from the HSA.
You can pay for it with the Fidelity HSA debit card if you choose to get one (keep the receipt).
You can pay for it with a credit card, keep the receipt, and reimburse yourself years later.

There are some calculations on which is better (options 1 and 2 are of course nearly the same) but, generally, keeping the money invested in the HSA is the best option.

[sonofsven]

I also use Fidelity for my HSA. I switched from Lively after they made some changes. I've never used any of my HSA money, it is all invested, but I may use some this year.

I don't have a co-pay for my labs, I wait for the bill then I pay with a credit card (I strive to put all spend on cc's for churning).

You want all your doctor visits and labs, etc., to go through your insurance first so it applies towards your deductible. I've never filled up my high ($6900 per year) deductible.

The qualified spending for an HSA is vast, so check that out so you keep all relevant receipts.

And yes, save all your receipts. I believe the only reason you need the receipts is if you are ever audited, I don't think there's any mechanism that requires you to show receipts besides that.

[Dicey]

Saving isn't enough, as receipts can fade. Scan them, store them and back them up. The mustachian play is to never use that money for small expenses, as it's tax-advantaged and can be used for any medical expense in the future. There is no obligation to use it up by any given date, as FSAs are.

[lilybluerose]

Thank you for simplifying this! Can I ask which fund you guys use for your HSA ? I am considering just doing a TDE. I will not have to use the money in the HSA as I am very used to paying for everything out of pocket anyways. The hsa is a nice lil bonus I am finding able to utilize this year!

[sonofsven]

Thank you for simplifying this! Can I ask which fund you guys use for your HSA ? I am considering just doing a TDE. I will not have to use the money in the HSA as I am very used to paying for everything out of pocket anyways. The hsa is a nice lil bonus I am finding able to utilize this year!

I use VOO from Vanguard, it tracks the S&P 500.

[elysianfields]

Fidelity is the bomb for HSAs.  No fees, no commissions, fractional share purchases, it has everything.

If you can contribute to your HSA through payroll, your contributions reduce your Federal, state, FICA and Medicare taxes (and consequently, your future SS benefit as well).

[lilybluerose]

Fidelity is the bomb for HSAs.  No fees, no commissions, fractional share purchases, it has everything.

If you can contribute to your HSA through payroll, your contributions reduce your Federal, state, FICA and Medicare taxes (and consequently, your future SS benefit as well).

I asked my accountant about this. He said I can fund it via my business bank account, and he will do the taxes with it to do this. Does that sound right? I give him the totals end of the year.

[elysianfields]

Fidelity is the bomb for HSAs.  No fees, no commissions, fractional share purchases, it has everything.

If you can contribute to your HSA through payroll, your contributions reduce your Federal, state, FICA and Medicare taxes (and consequently, your future SS benefit as well).

I asked my accountant about this. He said I can fund it via my business bank account, and he will do the taxes with it to do this. Does that sound right? I give him the totals end of the year.

My employer does it through payroll; does your accountant do payroll for you?  If not, check with @MDM  or @secondcor521 or @SeattleCPA or @seattlecyclone .

[MDM]

Either contributing via payroll deduction (so it doesn't hit W-2 Box 1 at all) or sending the money from a checking account to a Fidelity HSA account (and then deducting that on line 13 of https://www.irs.gov/pub/irs-pdf/f1040s1.pdf) is good.

See Health savings account - Bogleheads for more.