HSA Bank or Health Savings Administrators?

[Tatupu]

Through my employer I have an HSA account with HSA Bank. I now have enough of a chunk of money in the HSA that I would like to invest in Vanguard funds. The money is currently earning next to nothing and I do not plan to tap into the account to pay current medical costs.

I'm considering transferring the account from HSA Bank to Health Savings Administrators which seems to offer the best Vanguard options. I've poked around both sites to try to determine which makes the most sense long-term considering account and transaction fees, but it's still murky to me.

Has anybody done a detailed cost comparison of HSA Bank vs. Health Savings Administrators to determine which is best for investing in Vanguard funds?

Thanks!

[livesoft]

I thought with HSA Bank that one could invest in Vanguard ETFs at TDAmeritrade for no cost.

[Dinero]

I have used both, currently with HSA Bank.

If you keep $5,000 with the Bank and invest the rest in Vanguard ETFs at TD Ameritrade there are no plan fees assessed.

[centrifuge41]

I have used both, currently with HSA Bank.

If you keep $5,000 with the Bank and invest the rest in Vanguard ETFs at TD Ameritrade there are no plan fees assessed.

Yes, I'd stick with HSA Bank, and invest what's in excess of 5k via the self-directed TD Ameritrade account.

HSA Administrators has an annual fee, and the mutual funds cost an extra 0.32% on top of existing expense ratios (that expense is capped though at 20k per fund).

[letsgobobby]

our employer is paying the HSA bank low balance fee. You might check if that is the case in your situation.

I am planning on keeping a near zero balance at HSA, and investing the rest in VBR at TD Ameritrade.

[StretchArmstrong]

I have used both, currently with HSA Bank.

If you keep $5,000 with the Bank and invest the rest in Vanguard ETFs at TD Ameritrade there are no plan fees assessed.

Health Savings Administrators switched their custodian to HSA Bank, now any transaction and every form requires a HSA Admin account number and a HSA Bank account number, and the annual fee went up when they switched to HSA Bank. I always assumed the two were major competitors so I thought this was a strange move. I have never pulled money out of my account, and when I signed up a few years ago with HSA Admin there was no fee for this. Now I see there is a $10 fee dor this unless you jump through some hoops and deposit the money to HSA Bank first and then withdraw it. No mention of if HSA Bank's fees will apply if you do this.

I hate fees, and do not like being pennied and dimed, and no matter which way you go both of these companies will get you. If your employer is paying the fees then HSA Bank is probably better if you use free trading. If not, then I don't think it really makes much of a difference.

[tarnation]

Our plan uses HSA Bank and they waive balance fees (both maintenance fee and investment fees). You should check with your plan for the same waiver. If so, it is a no-brainier that HSABank/TDAM is best.
http://www.bogleheads.org/wiki/Health_Savings_Account#HSA_custodians_and_options

[EmergDoc]

My thoughts on it:

http://whitecoatinvestor.com/choosing-an-hsa-provider/

[FedGuy]

My thoughts on it:

http://whitecoatinvestor.com/choosing-an-hsa-provider/

Thanks, EmergDoc. But your information on Adirondack is outdated.

[EmergDoc]

My thoughts on it:

http://whitecoatinvestor.com/choosing-an-hsa-provider/

Thanks, EmergDoc. But your information on Adirondack is outdated.

Thanks man. The post is 5 months old. It's hard to keep 300 pages updated. Can you imagine going back and updating threads on this forum?

Too bad for those looking for a fixed rate, now it's only 1%.

[FedGuy]

Thanks man. The post is 5 months old. It's hard to keep 300 pages updated. Can you imagine going back and updating threads on this forum?

Too bad for those looking for a fixed rate, now it's only 1%.

I know (and sorry if my post came across as snippy...that's not how I meant it). I actually am looking for a fixed rate and have my HSA at Adirondack, so I'm trying to figure out where to move it. I used your post to come up with a list of finalists, but after focusing on their fixed rate products, I'm not so convinced that the other places are much better than Adirondack. At least my HSA at Adirondack is now classified as "dormant," which apparently means I only pay $4 in maintenance fees per year. Some of the alternative HSA administrators are still paying less than Adirondack for fixed rates.

[burgrat]

I'm in the same boat with my HSA at Adirondack (1%) with a current balance of about $15,000. I intend to leave it untouched, using it as a "stealth IRA" until I'm 65. I'm 43 now, so I want to grow it up as best possible over the next 22 years.
The HSA Bank option may be best for this. If I do utilize this and use the TD Ameritrade ETF's (http://research.tdameritrade.com/grid/public/etfs/commissionfree/commissionfree.asp), which choice do you guys think would be best?

Btw, thank you EmergDoc for your blog and contribution to the forum! Great stuff!

[OZAR]

The HSA Bank option may be best for this. If I do utilize this and use the TD Ameritrade ETF's (http://research.tdameritrade.com/grid/p ... onfree.asp), which choice do you guys think would be best?

Invest according to your AA and do Tax Efficient fund placement. I utilize my HSA, as well as other tax deferred accounts to hold REITS & BONDS.

[porcupine]

My thoughts on it:

http://whitecoatinvestor.com/choosing-an-hsa-provider/

Thanks, EmergDoc. But your information on Adirondack is outdated.

Thanks man. The post is 5 months old. It's hard to keep 300 pages updated. Can you imagine going back and updating threads on this forum?

Too bad for those looking for a fixed rate, now it's only 1%.

EmergDoc:

I hear you, but then you should also consider those who might follow your blog post without doing due diligence, especially because you specifically referred to it, thinking it to contain the latest information. In other words, why would you want to point someone to a post that, in your own words, is outdated?

- Porcupine

[itworks]

Good information from EmergDoc's blog. Just realized that Fidelity has HSA and fee is waived under some conditions. Since my 401K is with Fidelity, it seems a good choice for me to move to Fidelity for its spartan funds.

PS, first year with HSA and the employer-picked custodian is Optum Health Bank which seems not great in terms of investment choices and high fees.

[letsgobobby]

The HSA Bank option may be best for this. If I do utilize this and use the TD Ameritrade ETF's (http://research.tdameritrade.com/grid/p ... onfree.asp), which choice do you guys think would be best?

Invest according to your AA and do Tax Efficient fund placement. I utilize my HSA, as well as other tax deferred accounts to hold REITS & BONDS.

Small value is another good choice, and TD Ameritrade offers VBR commission free.

[EmergDoc]

Thanks man. The post is 5 months old. It's hard to keep 300 pages updated. Can you imagine going back and updating threads on this forum?

Too bad for those looking for a fixed rate, now it's only 1%.

I know (and sorry if my post came across as snippy...that's not how I meant it). I actually am looking for a fixed rate and have my HSA at Adirondack, so I'm trying to figure out where to move it. I used your post to come up with a list of finalists, but after focusing on their fixed rate products, I'm not so convinced that the other places are much better than Adirondack. At least my HSA at Adirondack is now classified as "dormant," which apparently means I only pay $4 in maintenance fees per year. Some of the alternative HSA administrators are still paying less than Adirondack for fixed rates.

You're going to have to work a lot harder than that to offend me. I do appreciate you pointing out exactly where things are out of date so I can easily update them. Obviously a post like that takes some time to research going to various sites etc. I was surprised it went out of date so fast.

[EmergDoc]

My thoughts on it:

http://whitecoatinvestor.com/choosing-an-hsa-provider/

Thanks, EmergDoc. But your information on Adirondack is outdated.

Thanks man. The post is 5 months old. It's hard to keep 300 pages updated. Can you imagine going back and updating threads on this forum?

Too bad for those looking for a fixed rate, now it's only 1%.

EmergDoc:

I hear you, but then you should also consider those who might follow your blog post without doing due diligence, especially because you specifically referred to it, thinking it to contain the latest information. In other words, why would you want to point someone to a post that, in your own words, is outdated?

- Porcupine

Advertising revenue? Just kidding. I didn't realize it contained bad information until he pointed it out. Hopefully it's correct now.

[porcupine]

My thoughts on it:

http://whitecoatinvestor.com/choosing-an-hsa-provider/

Thanks, EmergDoc. But your information on Adirondack is outdated.

Thanks man. The post is 5 months old. It's hard to keep 300 pages updated. Can you imagine going back and updating threads on this forum?

Too bad for those looking for a fixed rate, now it's only 1%.

EmergDoc:

I hear you, but then you should also consider those who might follow your blog post without doing due diligence, especially because you specifically referred to it, thinking it to contain the latest information. In other words, why would you want to point someone to a post that, in your own words, is outdated?

- Porcupine

Advertising revenue? Just kidding. I didn't realize it contained bad information until he pointed it out. Hopefully it's correct now.

Hey, if it was me, I would've said advertising revenue. You are an EmergDoc. For you, advertising revenue would be like pocket change. Not even!

Thanks for fixing it. I was seriously upset with Adirondack. I had been eying it since mid-2012, but did not really have sufficient balance to transfer over until December. I had communicated with a representative a couple of times over the year, and had asked her even if there were plans to lower the rate. Her response (politically correct, no doubt) had been that there were no rate changes planned.

I started the application, realized that I did not have all information handy (driver's license etc, if I remember right), so saved the half-completed application. Within a couple of days, someone here said that Adirondack was lowering rates from 3% to 1%. That I was shocked would be an understatement!! Needless to say, I did not open that account, and the money is still earning 0.01% interest. I am still weighing my options on HSA Bank or what?!!

- Porcupine

[RabbMD]

I have almost $35,000 in my hsa, but it's split. $20,000 is in td ameritrade through hsa bank, and $15,000 is part of my emergency fund, and kept at alliant credit union. I have unused receipts for like $10,000 in medical expenses going back 4 years ready to withdraw from the hsa if needed. I am an s corp >2% owner, and such the irs has special rules which preveng me from using a medicare/soc sec pretax cafeteria plan. So i invest in hsa every jan in a lump sum, and deduct it via my 1040. The alliant money earns 1.3% and I also have the cash savings version of my emergency fund there, so it is easy. Alliant is great with an easy to use website with fast and free ach pulls and PUSHES. Im very happy with them.

[leonard]

My thoughts on it:

http://whitecoatinvestor.com/choosing-an-hsa-provider/

Thanks, EmergDoc. But your information on Adirondack is outdated.

Thanks man. The post is 5 months old. It's hard to keep 300 pages updated. Can you imagine going back and updating threads on this forum?

Too bad for those looking for a fixed rate, now it's only 1%.

EmergDoc:

I hear you, but then you should also consider those who might follow your blog post without doing due diligence, especially because you specifically referred to it, thinking it to contain the latest information. In other words, why would you want to point someone to a post that, in your own words, is outdated?

- Porcupine

Does anyone have the expectation that any given blog post is continuously maintained for accuracy?

[porcupine]

[...]Does anyone have the expectation that any given blog post is continuously maintained for accuracy?

Well, if I specifically point someone to any blog post (mine or someone else's) to help them make a decision based on the contents of the blog post, IMO it behooves me to verify that the data in that blog post is correct. Alternatively, if I don't have the time to verify the information, I ought to at least add a caveat that the post was made eons ago, and might not be valid (faced with that caveat, the reader might choose not to follow the link).

Note that I am talking about the specific blog post, not the entire blog! Now that would definitely be a pain, and not something that is expected.

- Porcupine

[itworks]

Good information from EmergDoc's blog. Just realized that Fidelity has HSA and fee is waived under some conditions. Since my 401K is with Fidelity, it seems a good choice for me to move to Fidelity for its spartan funds.

PS, first year with HSA and the employer-picked custodian is Optum Health Bank which seems not great in terms of investment choices and high fees.

Finally got the chance to work on this. Unfortunately no go with Fidelity HSA, as it is not open to general public (instead, only via employers).

[porcupine]

Good information from EmergDoc's blog. Just realized that Fidelity has HSA and fee is waived under some conditions. Since my 401K is with Fidelity, it seems a good choice for me to move to Fidelity for its spartan funds.

PS, first year with HSA and the employer-picked custodian is Optum Health Bank which seems not great in terms of investment choices and high fees.

Finally got the chance to work on this. Unfortunately no go with Fidelity HSA, as it is not open to general public (instead, only via employers).

OptumHealth does not appear that bad after all - have you been following the last couple of threads on it?

- Porcupine

[itworks]

Yep a few confirmed that 3 vanguard funds are added; however, not to my account

I've sent an email to my employer's benefits representative, asking for the possibility to add them. If those vanguard funds are added, I agree this would be simply the best choice for me.

[Easy Rhino]

tatupu, HSA Bank TD Ameritrade option is probably good a enough option, especially since they're already what your employer works. It's even better if the employer pays any of the low balance fees for you.

I'd like to throw out the idea of Saturna capital, even though I don't have an account with them. While you have to pay commissions, there are few/no other fees. If all you want to do is buy an ETF once a year, it could be very cost effective.

[itworks]

Saturna Capital is an interesting idea. Did a quick reading on their brochure:

1. It claims "no-fee" HSA

If you invest in any of Saturna's no-load mutual funds, we will not charge you a custodial fee on your HSA or ESA account. There is never a fee on contributions or distributions, nor are there any monthly account charges.

2. However, I do not know whether there is any other hidden fee (hard to find from their web site). And, it looks like I have to invest in a list of pre-chosen 10 funds.

3. If I do not want to invest in those 10 funds, looks like I can open a Saturna Brokerage account and buy mutual funds there. It has access to Vanguard funds via "Saturna Brokerage Archipelago", with some stiff conditions to avoid transaction fee:

Saturna Brokerage proudly offers a select group of mutual funds for zero commission through Saturna Brokerage Archipelago™
. If you invest a minimum of $10,000 in any one of these selected funds and hold your shares for a minimum period of six months, Saturna Brokerage will waive the commissions for purchases and sales.

4. There are some inactivity fee and dividend reinvestment fee, not the best news for buy-and-hold fund investors.

Inactive account fee $25 per year
Inactive account fee (mutual funds only) $12.50 per year
Equity dividend reinvestment $1 per event ($4 minimum dividend)

[Eric]

My wife held her HSA money in a Saturna mutual fund several years ago. Our experience was fine, but we were very low-maintenance customers who never put their service to the test. I don't think we ever even called a customer service representative. We eventually moved the account not because of any problem, but to invest elsewhere in index funds. I don't recall if Saturna's brokerage operation wasn't as well-developed then, or perhaps we didn't investigate thoroughly enough.

Regarding the comments below:

It has access to Vanguard funds via "Saturna Brokerage Archipelago", with some stiff conditions to avoid transaction fee: . . . "If you invest a minimum of $10,000 in any one of these selected funds and hold your shares for a minimum period of six months, Saturna Brokerage will waive the commissions"

Those conditions don't sound very onerous to me. The minimum is the same as for Vanguard's Admiral funds, and the holding period shouldn't be a problem if you're using the HSA as an investment account.

There are some inactivity fee and dividend reinvestment fee, not the best news for buy-and-hold fund investors.

The inactivity fee apparently doesn't apply so long as you have at least one transaction during the calendar year. That transaction could be your annual contribution. I'm guessing the equity dividend reinvestment fee applies only to stocks (i.e., stock dividend reinvestment plans), but this would be something to verify with Saturna. Even if the equity dividend reinvestment fee applies, it's only $1 per dividend. If your fund pays annual dividends, that's $1 per year. If quarterly, $4 per year.

As noted I'm not currently a Saturna customer, but now I'm intrigued. The brokerage option sounds very appealing. Still requires some due diligence, of course, to see if there are other issues that aren't immediately apparent. (For example: Are all Vanguard funds available, or just a select few? Are Admiral or Signal shares available?)

[Eric]

I emailed Saturna and they replied by saying that the inclusion of Vanguard and Fidelity on the commission-free list was a mistake. They also mentioned there being a $10 surcharge that applies in some cases to cover mailings, etc. I've asked for clarification.

[Easy Rhino]

oh, sorry to mention, I traded some emails with Saturna in an effort to see if vanguard funds were avaialble fee-free in the brokerage account. While they didn't have a full listing of funds avaialble, I asked about 12 or so Vangaurd funds, and none were available fee-free. The least expensive way to get your vanguard on would be to buy ETFs and pay the stock commission. do it once a year so you don't get the inactivity fee. (which is coincidentally nicely timed if you're doing a rollover from another HSA once a year).

Saturna's proprietary funds have relatively higher expenses. One or two has done really well lately, but the expenses turned me off from further investigation.

... and I realized that I may have sidetracked teh conversionsation off of HSA Bank vs Health Savings Administrators. During my own investigation, I was tempted to open up an HSA Bank account, but keeping virtually nothing in it and getting all the fees (both the regular min bal fee and the brokerage min bal fee) and investing the funds at TDA, on the theory that having $5000 more fully invested would, on average, return more than the fees.

[FrysS]

don't mean to thread jack, but I've been trying to figure out a new hsa administrator. Currently I have wells Fargo through my employer, but the investment options are high expense (1%+). in addition, I live in California where hsa accounts are not state tax exempt. what administrator would folks suggest? I was hoping for a treasury type fund or worse case an international index fund that are tax efficient. Thanks!
- Frys

[Easy Rhino]

You have the same considerations as anyone else to pick an HSA, I'd recommend looking at the wiki for ideas of a custodian. Or heck, look at the discussion from this very same thread.

http://www.bogleheads.org/wiki/Health_Savings_Account

I'm in CA too. Eventually, if my HSA balance gets big enough that I feel like investing it rather than keeping it in the CU account I have now, I may look into gettins some sort of federal government bond fund (treasuries/tips, etc). This way the HSA shelters it from federal income tax, and the federal nature of it shelters it from state tax... "take THAT, California Franchise Tax Board!"

[grabiner]

don't mean to thread jack, but I've been trying to figure out a new hsa administrator. Currently I have wells Fargo through my employer, but the investment options are high expense (1%+). in addition, I live in California where hsa accounts are not state tax exempt. what administrator would folks suggest? I was hoping for a treasury type fund or worse case an international index fund that are tax efficient. Thanks!

TIPS are a good choice for an HSA in California. If you use an adminstrator such as HSA Bank, which has a brokerage account, you can buy TIPS ETFs (PIMCO has several at 0.20% expenses with different durations) and avoid the state taxes.

[tarnation]

don't mean to thread jack, but I've been trying to figure out a new hsa administrator. Currently I have wells Fargo through my employer, but the investment options are high expense (1%+). in addition, I live in California where hsa accounts are not state tax exempt. what administrator would folks suggest? I was hoping for a treasury type fund or worse case an international index fund that are tax efficient. Thanks!

TIPS are a good choice for an HSA in California. If you use an adminstrator such as HSA Bank, which has a brokerage account, you can buy TIPS ETFs (PIMCO has several at 0.20% expenses with different durations) and avoid the state taxes.

at HSABank/TDAM the commision free list has TIP and STPZ on it. You can also buy individual TIPS.