HSA with HSA bank (my options?)

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AntsOnTheMarch
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HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Wed Jun 07, 2017 8:44 am

I finally figured out that I need not pay our medical expenses from our HSA. :oops:

Going forward, I would like to treat our HSA as part of our investment portfolio—using Vanguard index funds—and pay for any medical expenses from our savings account/emergency cash. Currently, our HSA is with HSA Bank. Their investment options are through TD Ameritrade and DEVENIR.

Is anyone here familiar with their fees and investment options? I will investigate but perhaps someone has a quick and ready answer?

Plan B
If that doesn't work out, Vanguard suggests:
If you want to open an HSA with an all-Vanguard fund lineup, consider HealthSavings Administrators or HealthEquity. Each organization offers a selection of about 20 Vanguard funds covering a variety of asset classes--and their accounts have no minimum balance requirements.
I assume that I can transfer my account from HSA bank to one of these without incurring taxes. Is the process complicated? I remember transferring IRA accounts to Vanguard many years ago and it involved a notary and paperwork? Some took several tries for whatever reasons (can't remember). Is it possible to handle all this online now?

Again, I will investigate but if you care to chime in, please do so.

Thanks in advance!

bogglizer
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Re: HSA with HSA bank (my options?)

Post by bogglizer » Wed Jun 07, 2017 9:27 am

The best way to transfer money from one HSA to another without fees is to write a check. If you fill out their fancy forms, you will pay a transfer fee. Actually two checks, since there will be a slug of interest at the end, minus any monthly fee. Never used a notary for anything. I transfered my HSA from HSABank to HealthEquity, but only because of a new employer. As far as HSAs go, HSABank wasn't bad. Most of the available funds for my company were high fee, but I complained and they added a few Vanguard funds. I don't know if every employer gets the same lineup of funds.

deltaneutral83
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Re: HSA with HSA bank (my options?)

Post by deltaneutral83 » Wed Jun 07, 2017 9:30 am

I use HSABank and TDA, about a month in. Current account holder at TDA so very familiar with everything TDA has to offer. You can get the three fund portfolio with VTI/BND/VXUS. VXUS isn't commission free, the other two are. If you want to break down VXUS into commission free, it' 92ish% VEU and 8ish% VSS (thanks to posters who helped me on that). I just use VEU for now and may convert it to VXUS every year or two as they track to within a few basis points annually. You must "enroll" in commission free ETF's with TDA, which is 2 or 3 "OK" clicks. Whatever you buy, don't sell within 30 days, or it triggers fees on the commission free ETF's.

When you indeed do transfer/rollover from custodian #1 to HSABank, try to fax the form yourself or drop it off with custodian # 1, I have a local credit union and this expedited the process. Fees with HSABank are $3 a month for the TDA portion, and $2.50 for not keeping $5k balance at HSABank, and do paper statements, don't lose your debit card, etc. etc. to eliminate other miscellaneous fees.
The best way to transfer money from one HSA to another without fees is to write a check. If you fill out their fancy forms, you will pay a transfer fee
To the best of my knowledge I see no fees that HSABank hit me with for transferring from custodian # 1 into HSABank using the transfer or rollover option.

NiceUnparticularMan
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Re: HSA with HSA bank (my options?)

Post by NiceUnparticularMan » Wed Jun 07, 2017 9:33 am

We transfer from a work HSA to HSA Bank. We like the TD Ameritrade option (particularly since our taxable account is also with TD), and use the commission-free ETFs. There are quite a few Vanguard options as well as some other good funds--and if you are just treating this as part of one overall portfolio, you can probably just stick it in one fund.

AntsOnTheMarch
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Re: HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Wed Jun 07, 2017 12:11 pm

deltaneutral83 wrote:Fees with HSABank are $3 a month for the TDA portion, and $2.50 for not keeping $5k balance at HSABank, and do paper statements, don't lose your debit card, etc. etc. to eliminate other miscellaneous fees.
Do you (or does anyone else here) know if the monthly brokerage fee exists with the Vanguard recommended HSAs? The $5k minimum is not an issue. And thanks for the tip about not losing the debit card and miscellaneous fees. Not likely to lose stuff but it's always good to keep hidden fees in mind.

deltaneutral83
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Re: HSA with HSA bank (my options?)

Post by deltaneutral83 » Wed Jun 07, 2017 1:20 pm

AntsOnTheMarch wrote:
deltaneutral83 wrote:Fees with HSABank are $3 a month for the TDA portion, and $2.50 for not keeping $5k balance at HSABank, and do paper statements, don't lose your debit card, etc. etc. to eliminate other miscellaneous fees.
Do you (or does anyone else here) know if the monthly brokerage fee exists with the Vanguard recommended HSAs? The $5k minimum is not an issue. And thanks for the tip about not losing the debit card and miscellaneous fees. Not likely to lose stuff but it's always good to keep hidden fees in mind.
I am not sure one can sign up for an HSA account with Vanguard individually without it being tied to your employer?

AntsOnTheMarch
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Re: HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Wed Jun 07, 2017 2:23 pm

deltaneutral83 wrote:
AntsOnTheMarch wrote:
deltaneutral83 wrote:Fees with HSABank are $3 a month for the TDA portion, and $2.50 for not keeping $5k balance at HSABank, and do paper statements, don't lose your debit card, etc. etc. to eliminate other miscellaneous fees.
Do you (or does anyone else here) know if the monthly brokerage fee exists with the Vanguard recommended HSAs? The $5k minimum is not an issue. And thanks for the tip about not losing the debit card and miscellaneous fees. Not likely to lose stuff but it's always good to keep hidden fees in mind.
I am not sure one can sign up for an HSA account with Vanguard individually without it being tied to your employer?
I'm self-employed. I just went to the HealthSavings Administrators website and it "appears" that I am eligible. I'd have to check further to confirm. Still don't know if they would charge fees to invest the HSA money into a fund though. Anyone know?

harvestbook
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Re: HSA with HSA bank (my options?)

Post by harvestbook » Wed Jun 07, 2017 4:39 pm

You pay $45 a year plus 0.25 percent ER at HealthSavingsAdministrator, in addition to the Vanguard index fund ERs. (However, you can buy the Vanguard Admiral shares without having to reach the $10,000 bar, so you can--for example--get Total Stock Market Index at 0.04 ER.) There are also other institutional choices like DFA and I believe Fidelity or Schwab if you prefer.

I am happy with them so far, enrolling earlier this year as a self-employed person--easy online transfers, etc. The total expense is a little high starting out but over a few years it's not so bad and gets better. Not the cheapest choice out there but it's worth it to me to not have to hassle with mailing paper checks or calling in to request money movements like some of the other places require.
I'm not smart enough to know, and I can't afford to guess.

AntsOnTheMarch
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Re: HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Wed Jun 07, 2017 4:46 pm

harvestbook wrote:You pay $45 a year plus 0.25 percent ER at HealthSavingsAdministrator, in addition to the Vanguard index fund ERs. (However, you can buy the Vanguard Admiral shares without having to reach the $10,000 bar, so you can--for example--get Total Stock Market Index at 0.04 ER.) There are also other institutional choices like DFA and I believe Fidelity or Schwab if you prefer.

I am happy with them so far, enrolling earlier this year as a self-employed person--easy online transfers, etc. The total expense is a little high starting out but over a few years it's not so bad and gets better. Not the cheapest choice out there but it's worth it to me to not have to hassle with mailing paper checks or calling in to request money movements like some of the other places require.
Thank you! Fees seem like more or less a wash with hsa bank so I will stay with them. Very helpful info!!!

John Laurens
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Re: HSA with HSA bank (my options?)

Post by John Laurens » Wed Jun 07, 2017 5:13 pm

I have have HSA bank with TDAmeritrade. I have 50k+ on the TDA side. I keep 100 bucks in the HSA account after each yearly sweep of my HSA contribution to TDA. The monthly fee for keeping the low balance is $5.50. I'm fine with that. I would rather stay nearly 100% invested with my overall AA.

Regards,
John

AntsOnTheMarch
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Re: HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Wed Jun 07, 2017 5:19 pm

@John Laurens: Thank you! It certainly isn't clear from any of these HSAs websites what the fees are so this sort of information in invaluable. What I gather is that it will cost to invest through HSA (not paying any fees now due to balance) but likely to make it up and then some in growth.

John Laurens
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Re: HSA with HSA bank (my options?)

Post by John Laurens » Wed Jun 07, 2017 5:34 pm

You are not kidding about lack of clarity and service with each HSA provider. HSA bank isn't perfect either with website and service. I figure, over time, the 5000 "minimum" that I keep at TDA will easily make up for the $66 (5.50x12) yearly fee.

John

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Re: HSA with HSA bank (my options?)

Post by knpstr » Wed Jun 07, 2017 5:39 pm

You can buy some Vanguard ETFs through TD Ameritrade that are commission free trades. TD has a list.

I have HSA bank and invest to the connected TD account and I incur $0 fees of any kind at either business. I keep the $5,000 in cash balance at HSA bank for "emergencies" and the surplus is at TD in VTI.
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AntsOnTheMarch
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Re: HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Wed Jun 07, 2017 9:10 pm

John Laurens and knpstr, thanks for the comments. Very helpful!

Edit: I just signed up to invest with TD Ameritrade through HSA bank. I will need to wait 5-7 days for completion of process but it appears as though hsa bank lowered their fees so I thought I'd pass the information on.
You have the opportunity to invest funds from your HSA Bank account number xxxxxxx with TD Ameritrade. You can choose from thousands of stocks, bonds, and mutual funds, with no HSA minimum to begin investing.

A $3.00 monthly investment service fee may be charged by HSA Bank. This fee will be waived for any month that your HSA Bank Health Savings Account maintains an average daily balance at or above the Balance Waiver Amount* of $5,000.00 for the calendar month. Only those funds in your HSA Bank Health Savings Account are included in the Balance Waiver Amount.

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Re: HSA with HSA bank (my options?)

Post by sperry8 » Thu Jun 08, 2017 5:27 am

AntsOnTheMarch wrote:John Laurens and knpstr, thanks for the comments. Very helpful!

Edit: I just signed up to invest with TD Ameritrade through HSA bank. I will need to wait 5-7 days for completion of process but it appears as though hsa bank lowered their fees so I thought I'd pass the information on.
You have the opportunity to invest funds from your HSA Bank account number xxxxxxx with TD Ameritrade. You can choose from thousands of stocks, bonds, and mutual funds, with no HSA minimum to begin investing.

A $3.00 monthly investment service fee may be charged by HSA Bank. This fee will be waived for any month that your HSA Bank Health Savings Account maintains an average daily balance at or above the Balance Waiver Amount* of $5,000.00 for the calendar month. Only those funds in your HSA Bank Health Savings Account are included in the Balance Waiver Amount.
Right. This is what I do as well. Keep $5,001 dollars in their savings account to waive all monthly fees. Remaining monies are with TD Ameritrade and I invest in their 100+ fee free ETFs which include many low ER Vanguard and iShares funds.
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NiceUnparticularMan
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Re: HSA with HSA bank (my options?)

Post by NiceUnparticularMan » Thu Jun 08, 2017 7:17 am

I also keep the $5000 in cash at HSA bank and invest the remainder through TD Ameritrade. I then include the cash in my cash allocation in my annual rebalancing.

So I am just giving up the difference between my lowest-rate on fixed-income and the even lower rate at HSA bank. It is basically a wash with paying the monthly fees instead, and I figure there is probably some benefit to having $5000 for emergency medical expenses if I really, really need it.

AntsOnTheMarch
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Re: HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Thu Jun 08, 2017 8:56 am

sperry8 and NiceUnparticularMan, thank you both for your input. While I wait for the TD Ameritrade account to be activated, I will consider that as well as just accepting the fee in order to invest the 5k in VTI and just use other saving for any needed medical expenses. I'm leaning towards the latter for our situation because I figure it will be pretty easy to beat that fee with returns over the next 5 years. If not, I'm going to have a bigger problem than what happens to the 5k. :annoyed

bogglizer
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Re: HSA with HSA bank (my options?)

Post by bogglizer » Thu Jun 08, 2017 9:07 am

deltaneutral83 wrote:To the best of my knowledge I see no fees that HSABank hit me with for transferring from custodian # 1 into HSABank using the transfer or rollover option.
The fees are from the old HSA to transfer out.

deltaneutral83
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Re: HSA with HSA bank (my options?)

Post by deltaneutral83 » Thu Jun 08, 2017 9:38 am

John Laurens wrote:You are not kidding about lack of clarity and service with each HSA provider. HSA bank isn't perfect either with website and service. I figure, over time, the 5000 "minimum" that I keep at TDA will easily make up for the $66 (5.50x12) yearly fee.
John
You are going to incur the $3 fee from TDA to use their brokerage service regardless of how much cash you keep at HSA. One poster above mentioned how he has no fees so I assume he has a special deal going that I'm not aware. If you don't need the $5k for medical expenses for that year it of course makes sense to invest it over time. $2.50 x 12 = $30 which is 60 basis points on $5k. My former custodian was giving me 1.5% so I need to make 2.1% a year to break even. If we don't do that over the next 30 years there will be bigger issues although I use HSA for International in my AA for tax reasons and Int. has not done well the last 6 years but it's trouncing savings%+60bps that I would have gotten. No matter as it's part of my overall AA and I was cherry picking anyway just to point out that it still comes out ahead even as the weaker performing of my AA lately.
The fees are from the old HSA to transfer out
Understood, I use a local credit union as custodian #1, it would be sayonara if they tried to charge a fee to me on this.

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Re: HSA with HSA bank (my options?)

Post by centrifuge41 » Thu Jun 08, 2017 10:44 am

deltaneutral83 wrote:You are going to incur the $3 fee from TDA to use their brokerage service regardless of how much cash you keep at HSA. One poster above mentioned how he has no fees so I assume he has a special deal going that I'm not aware. If you don't need the $5k for medical expenses for that year it of course makes sense to invest it over time. $2.50 x 12 = $30 which is 60 basis points on $5k. My former custodian was giving me 1.5% so I need to make 2.1% a year to break even. If we don't do that over the next 30 years there will be bigger issues although I use HSA for International in my AA for tax reasons and Int. has not done well the last 6 years but it's trouncing savings%+60bps that I would have gotten. No matter as it's part of my overall AA and I was cherry picking anyway just to point out that it still comes out ahead even as the weaker performing of my AA lately.
Yeah, I also park $5k with HSA Bank, earning minimal interest (0.15% now: link). There are no fees to move $ to TD Ameritrade and invest in the ETFs (I don't get hit with the $3 fee above). Just don't sell the same ETF within 30 days of buying shares.

I agree that if I moved $4900 out from the 0.15% interest-bearing account, I could be paying an extra $2.50/month maintenance fee, and $3/month investment fee ($66/year), and I could be earning an SEC yield of 2.37% instead (about $116/year, which is more than the $66/year + ~$7 foregone interest). But I don't log in often (past HSA funds invested - now under a PPO so unable to add new funds), so I wanted to reduce maintenance.

lsui
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Re: HSA with HSA bank (my options?)

Post by lsui » Thu Jun 08, 2017 3:02 pm

I invested every cent at TDA through HSABank, no way I leave $5K there earning next to nothing. It gives me two benefits: 1) maximum investment return as no money sits idle in the cash account. 2) HSABank does not charge me $2.5/month fee with no balance in the cash account, I am only charged $3/month. The only draw back is I need to log into HSABank account once a month, to do an online transfer of $3 from TDA to pay off the fee debit.

AntsOnTheMarch
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Re: HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Fri Jun 09, 2017 5:35 am

lsui wrote:I invested every cent at TDA through HSABank, no way I leave $5K there earning next to nothing. It gives me two benefits: 1) maximum investment return as no money sits idle in the cash account. 2) HSABank does not charge me $2.5/month fee with no balance in the cash account, I am only charged $3/month. The only draw back is I need to log into HSABank account once a month, to do an online transfer of $3 from TDA to pay off the fee debit.
Let me see if I understand this. You are saying...

1. If you have zero balance in your HSABank account you are charged $3/mo for not meeting $5k monthly balance but not the $2.50/mo for having a TDA account. If however, you had a $1 balance at HSABank, you'd be charged $3.00+2.50/mo. Is that correct?

2. You sell some amount of XXX investment every month in the amount of $3 in order to pay your monthly HSA fee?

lsui
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Re: HSA with HSA bank (my options?)

Post by lsui » Tue Jun 20, 2017 7:27 pm

AntsOnTheMarch wrote:Let me see if I understand this. You are saying...

1. If you have zero balance in your HSABank account you are charged $3/mo for not meeting $5k monthly balance but not the $2.50/mo for having a TDA account. If however, you had a $1 balance at HSABank, you'd be charged $3.00+2.50/mo. Is that correct?

2. You sell some amount of XXX investment every month in the amount of $3 in order to pay your monthly HSA fee?
1. Almost correct, except if you keep only $1 in the cash account, they will only charge/deduct the $1, NOT $2.5. In other words, your balance will not go negative due to that fee (different from how $3 investment fee is charged, it simply creates a $3 debit in the cash account).

2. Yes, I either have a few loose dollars lying around at TDA account, or just sell a bit of no commission/fee fund.

AntsOnTheMarch
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Re: HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Tue Jun 20, 2017 8:50 pm

lsui wrote:
AntsOnTheMarch wrote:Let me see if I understand this. You are saying...

1. If you have zero balance in your HSABank account you are charged $3/mo for not meeting $5k monthly balance but not the $2.50/mo for having a TDA account. If however, you had a $1 balance at HSABank, you'd be charged $3.00+2.50/mo. Is that correct?

2. You sell some amount of XXX investment every month in the amount of $3 in order to pay your monthly HSA fee?
1. Almost correct, except if you keep only $1 in the cash account, they will only charge/deduct the $1, NOT $2.5. In other words, your balance will not go negative due to that fee (different from how $3 investment fee is charged, it simply creates a $3 debit in the cash account).

2. Yes, I either have a few loose dollars lying around at TDA account, or just sell a bit of no commission/fee fund.
I see. Thanks!

4nwestsaylng
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Re: HSA with HSA bank (my options?)

Post by 4nwestsaylng » Tue Jun 20, 2017 10:22 pm

I have HSA Bank, again don't log in every month, but am going to review these fees with them, I really wasn't aware of them.

Question: I am just retired, wonder if it is better to pay my health insurance premiums now out of my HSA, or out of my income. I think that to deduct medical expenses from income they have to comprise at least 7% of adjusted gross income, so an AGI of 40,000 would need $2800 or more in medical expenses. That is doable if premiums paid out of savings. Only reason to do this would be to allow HSA balance to continue growing. Is there a RMD required on the HSA at age 701/2 similar to an IRA? If you withdraw HSA funds for nonmedical expenses, is it taxed as income the same as from a traditional IRA or is the tax greater?

No plans to tap it now, but I have thought of using it for medical premiums instead of out of current income, which is much lower now that I am retired. I guess it is really no different than if I were starting to tap my 401K to pay the premiums.

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Re: HSA with HSA bank (my options?)

Post by masteraleph » Tue Jun 20, 2017 11:06 pm

There is no RMD from an HSA, but when inherited by someone other than a spouse, the fair market value becomes taxable income. And it happens immediately; there is no RMD schedule like a 401k (that amount is reduced by the amount the beneficiary pays for your health costs within 1 year after your death- e.g. if your estate is paying off your medical bills after you die). For that reason, if you are concerned about not only having money for retirement but passing money on when you pass, it's a good idea to take money out of the HSA. I'd certainly tap it prior to a Roth account. It's reasonable to use it to cover Medicare premiums as well. If RMDs from tax-deferred accounts will be a problem in the future and you have deferred medical expenses, or even could pay Medicare premiums out of pocket, it could be worth converting some to Roth and using HSA money to pay for the taxes, etc.

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Re: HSA with HSA bank (my options?)

Post by grabiner » Wed Jun 21, 2017 9:15 pm

4nwestsaylng wrote:I have HSA Bank, again don't log in every month, but am going to review these fees with them, I really wasn't aware of them.

Question: I am just retired, wonder if it is better to pay my health insurance premiums now out of my HSA, or out of my income. I think that to deduct medical expenses from income they have to comprise at least 7% of adjusted gross income, so an AGI of 40,000 would need $2800 or more in medical expenses. That is doable if premiums paid out of savings. Only reason to do this would be to allow HSA balance to continue growing. Is there a RMD required on the HSA at age 701/2 similar to an IRA? If you withdraw HSA funds for nonmedical expenses, is it taxed as income the same as from a traditional IRA or is the tax greater?
The HSA has no RMDs, but it it distributed and taxable upon your death (unless you leave it to a spouse). Therefore, it is better to exhaust your HSA in preference to your IRA; IRAs can be inherited on more favorable terms. If you have RMDs you from an IRA which you don't need to spend, you can use those to pay the tax on converting part of the IRA to a Roth IRA, to avoid future RMDs during your lifetime.

If you withdraw from an HSA for non-medical expenses before age 65, there is a 20% penalty as well as the income tax. After 65, withdrawals are taxed as ordinary income.

Note that most medical insurance premiums are not allowable medical expenses from an HSA; see IRS Publication 969: Distributions From an HSA to see which premiums are allowable.
David Grabiner

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Re: HSA with HSA bank (my options?)

Post by danaht » Wed Jun 21, 2017 9:49 pm

I also recommend staying with HSA Bank and using the TD Ameritrade brokerage window to invest in Vanguard's ETFs. Most of the Vanguard ETFs are commission free at TD Ameritrade. In my opinion - the HSA Bank / Td Ameritrade combo is as good as it gets until large brokerages start opening HSA accounts to the public. I think eventually HSA Accounts will be as common as Roth and other IRA accounts. This is especially true if the HSA contribution limits double in size and more (or most) plans become HSA eligible in the future.

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Re: HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Thu Jun 22, 2017 11:34 am

danaht wrote:Most of the Vanguard ETFs are commission free at TD Ameritrade. In my opinion - the HSA Bank / Td Ameritrade combo is as good as it gets until large brokerages start opening HSA accounts to the public.
I purchased VTI and was charged a commission.

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Re: HSA with HSA bank (my options?)

Post by lsui » Thu Jun 22, 2017 1:03 pm

AntsOnTheMarch wrote: I purchased VTI and was charged a commission.
You need to enroll in their commission free ETF program first before purchasing anything.

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Re: HSA with HSA bank (my options?)

Post by AntsOnTheMarch » Thu Jun 22, 2017 1:12 pm

lsui wrote:
AntsOnTheMarch wrote: I purchased VTI and was charged a commission.
You need to enroll in their commission free ETF program first before purchasing anything.
Oh, thanks. I wasn't aware of that. I'll check into it. :sharebeer

Edit: I just contacted TD Ameritrade and asked them about enrolling in their commission free ETF program. Within an hour, they responded, pointed me to the proper link, explained the details of the program, and offered me a courtesy refund for the commission. Nice!

Thanks again! :sharebeer

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Re: HSA with HSA bank (my options?)

Post by 4nwestsaylng » Thu Jun 22, 2017 10:38 pm

Thanks for the information. My HSA has about 65 K in it, and my IRA is a Roth. RMDs will be from my TSP account. With retirement this year my marginal tax rate has dropped to 25% at the most, so perhaps it would be an idea to withdraw HSA funds (I am 68), pay the tax, and put the funds in my Roth IRA.
Couldn't I withdraw over several tax years, say $10k a year for three years, to minimize income tax, and in three years I wouldl leave $35 K in the HSA to meet my annual $1500 deductible on my health insurance plan. I assume that even if premiums can't be paid out of HSA, the deductibles can.

That is one of the advantages of the HSA, you can go to a higher deductible to reduce premiums. While working, I met the deductible out of my income, but now I could use my HSA to fund the deductible, correct?

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Re: HSA with HSA bank (my options?)

Post by ChrisC » Fri Jun 23, 2017 8:58 am

4nwestsaylng wrote:Thanks for the information. My HSA has about 65 K in it, and my IRA is a Roth. RMDs will be from my TSP account. With retirement this year my marginal tax rate has dropped to 25% at the most, so perhaps it would be an idea to withdraw HSA funds (I am 68), pay the tax, and put the funds in my Roth IRA.
Couldn't I withdraw over several tax years, say $10k a year for three years, to minimize income tax, and in three years I wouldl leave $35 K in the HSA to meet my annual $1500 deductible on my health insurance plan. I assume that even if premiums can't be paid out of HSA, the deductibles can.

That is one of the advantages of the HSA, you can go to a higher deductible to reduce premiums. While working, I met the deductible out of my income, but now I could use my HSA to fund the deductible, correct?
Health insurance premiums, if you're over 65, can be paid from your HSA, except for Medigap or Medicare supplemental plan insurance premiums. I'd link you to a thread here in this forum that highlights this -- actually a thread titled re Medicare Premiums -- but I don't know how to link threads here.

Why wouldn't insurance co-pays and deductibles be covered as reimburseable medical expenses? The underlining activity with the co-pay or deductible is a medical expense. You're confusing things or over-thinking.

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birdog
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Re: HSA with HSA bank (my options?)

Post by birdog » Fri Jun 23, 2017 11:18 am

Good thread. I currently have my HSA with Alliant CU. They pay .65% APY. I can invest the money thru SaveDaily (Alliant's HSA investment partner) for $5.95 each month. Unlimited trades for that price and no minimum account balance fee from Alliant. I haven't invested the HSA money yet. Based on the info here I'm leaning towards transferring to HSA Bank and investing thru TDA (where my IRAs and taxable accounts are). Anyone use Alliant & SaveDaily? I wish I'd educated myself on HSAs before I spent my HSA account down by about 50%. I now can no longer contribute since we don't have health insurance anymore. (We use Medi-Share which isn't HSA compatible since it's technically not insurance.) Anyway, I learned a lot from this thread and am considering transferring to HSA Bank (TDA).
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4nwestsaylng
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Re: HSA with HSA bank (my options?)

Post by 4nwestsaylng » Wed Jun 28, 2017 12:18 am

Thanks Chris C. You are right, copays and deductibles can be paid out of HSA, but while working I always paid out of my income, to preserve the HSA, and also as a way of "forced saving", I would have spent the money on something else.

I am going to leave the money in the HSA rather than pay the tax (over 65, so would be regular income tax) and put it in a Roth. The latter mght be better, but for now I like to know that I have a nest egg for my own health expenses if needed. Will let it hopefully grow in the TD account, index ETFs.

Small Law Survivor
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Re: HSA with HSA bank (my options?)

Post by Small Law Survivor » Wed Jun 28, 2017 7:47 am

I've had the HSA/TDAmeritrade combo for many years - it seems fine to me. Not sure what the fees have been at the Ameritrade end, since I very rarely make any changes there. I invested in one fund years ago, and that fund is part of my overall asset allocation.

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Re: HSA with HSA bank (my options?)

Post by aristotelian » Wed Jun 28, 2017 8:11 am

I am looking at HSA Bank/TD. Looks like a great option but somewhat pricey with $24 fee plus $5000 minimum balance or $60 more annually. I am also looking at SelectAccount ($1/month or $1000 min plus $18/year, mutual funds with upgrade to Schwab Brokerage @ $10,000 balance) and HSA Authority ($36 annually, $1,000 minimum).

SelectAccount looks like the best overall combination with self-directed brokerage option and lower fees than HSA Bank. The only downside is the minimum for the brokerage option, but they have good Vanguard options until you hit that threshold.

jadedfalcons
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Re: HSA with HSA bank (my options?)

Post by jadedfalcons » Wed Jun 28, 2017 8:15 am

I'll parrot what another poster said on another thread before: why don't more people use Saturna? $24.95 fee to buy a Vanguard investment, so if you only do one trade a year (like their Wellington fund) it's inexpensive, and you don't have monthly fees and no need to maintain a cash balance. Worst case scenario is their $25/yr inactive fee, which is barely over $2 a month.

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Re: HSA with HSA bank (my options?)

Post by aristotelian » Wed Jun 28, 2017 12:45 pm

jadedfalcons wrote:I'll parrot what another poster said on another thread before: why don't more people use Saturna? $24.95 fee to buy a Vanguard investment, so if you only do one trade a year (like their Wellington fund) it's inexpensive, and you don't have monthly fees and no need to maintain a cash balance. Worst case scenario is their $25/yr inactive fee, which is barely over $2 a month.
Is it also $24.95 to make a withdrawal? That is a dealbreaker for me since I would like the option to pay for qualified expenses out of the account. The once/year strategy is a good way of minimizing expenses but that also means that you are going to have on average $3,000+ out of market while waiting for the calendar to turn. So in effect it is $24.95 with a $3,000 minimum.

ARM07470
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Re: HSA with HSA bank (my options?)

Post by ARM07470 » Sat Jul 01, 2017 5:03 pm

lsui wrote:I invested every cent at TDA through HSABank, no way I leave $5K there earning next to nothing. It gives me two benefits: 1) maximum investment return as no money sits idle in the cash account. 2) HSABank does not charge me $2.5/month fee with no balance in the cash account, I am only charged $3/month. The only draw back is I need to log into HSABank account once a month, to do an online transfer of $3 from TDA to pay off the fee debit.
Nice discovery! Your post convinced me to stop keeping $5,000 in my HSA account just to avoid fees. It's too bad they don't allow you to setup a recurring transfer to move the $3 every month. Maybe I'll just leave the negative balance and wait for them to auto-transfer the fee themselves.

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Artsdoctor
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Re: HSA with HSA bank (my options?)

Post by Artsdoctor » Sat Jul 01, 2017 6:24 pm

I've used Health Savings Administrators for well over a decade. They've had changes over the years, and their website has been clunky when compared to other brokerage houses. The accounts have been for investment purposes and I've been using the Balanced Index fund for the past few years.

Currently, they charge $45 per year although I've had that waived for years. I'm not sure what criteria they use but I was told that since I'm using the accounts for investment purposes, they would waive the annual fee.

You get the Admiral shares ERs, which are extremely low. Health Savings Administrators will also charge you a 0.25% annual administrative fee which is deducted from shares directly each quarter.

So all-in costs have been about 0.32% per year for the Vanguard Balanced Fund. I can live with that and I wouldn't do anything differently. I personally would not advocate keeping $5,000 in cash because the opportunity cost could potentially be significant. Of course, if there's a prolonged bear market again, you might wish you had the cash. But since it's an investment account, in general, I avoid a cash balance.

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Re: HSA with HSA bank (my options?)

Post by Impromptu » Sat Jul 01, 2017 6:53 pm

I have no fees at HSA Bank. I keep $5000 in the savings account and move everything else over to TD Ameritrade for their no fee Vanguard investments VTI, BND, and VEU. I do not want the hassle of keeping $0 in the account and paying the fee each month. But that is a personal choice that each individual must make.

In addition, I can link this account to other TD Ameritrade accounts so that I can see all of those accounts with one login.
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