What to do with two HSAs?

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colonialrampage
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Joined: Tue Aug 21, 2018 12:38 am

What to do with two HSAs?

Post by colonialrampage » Fri Nov 09, 2018 3:00 am

I'm thouroughly confused on this one, so I hope someone can point me the right direction.

My wife and I had separate HDHPs for several years and each opened HSAs individually. When we had kids they went on her plan and we continued to put the individual amounts into our HSAs (not exceeding the family limit). This year we were finally able to get on the same family plan.

The provider where we have our current HSAs isn't great and so I'm looking to move those accounts anyway.

My questions:
1. Can I take the funds from the two HSAs and roll them into a single account at a new provider?
2. If not, can I choose one of the original two accounts and do family contributions there while stopping contributions to the other account?
3. Are there other options I'm overlooking?
4. Any suggestions for where to move my HSAs? An investing option would be nice, but we do plan on paying all medical expenses out of this account and a decent interest rate option would be fine as well.

Thanks so much for any help you can give!

PFInterest
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Joined: Sun Jan 08, 2017 12:25 pm

Re: What to do with two HSAs?

Post by PFInterest » Fri Nov 09, 2018 7:28 am


cmublitz
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Re: What to do with two HSAs?

Post by cmublitz » Fri Nov 09, 2018 7:42 am

PFInterest wrote:
Fri Nov 09, 2018 7:28 am
they can all be rolled into one.
https://www.whitecoatinvestor.com/the-b ... s-account/
I am not a lawyer and will delete my response if wrong, but I haven't seen that this was possible. I was operating under the assumption that HSAs are an extension of the IRA tax code and as such are named individually, not jointly or combine-able as suggested. Only death/inheritance can transfer ownership from one individual to another.

People on Bogleheads seem to like Lively as the HSA custodian. I would have used them if I didn't have one from my employer. Inertia and all that for my situation. In your situation, I would spend down the HSA account you aren't going to be contributing to any more and invest the other.

Edit: Thanks for the clarification Spirit Rider.
Last edited by cmublitz on Fri Nov 09, 2018 8:37 am, edited 2 times in total.

Spirit Rider
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Re: What to do with two HSAs?

Post by Spirit Rider » Fri Nov 09, 2018 8:34 am

  1. @cmublitz is not correct that HSAs are an extension of the IRA tax code, but is correct that like all tax advantaged accounts they are individual accounts. They can not be rolled over to another individual's account while alive.
  2. Under the HSA rules for married people. If either spouse has an HSA qualifying family HDHP, the other spouse is considered to have one also. The family contribution limit can be allocated in any manner the spouses choose. Therefore, the full contribution can be made to either spouse's accounts.
  3. At a minimum the best option is most likely to be to contribute through payroll deduction through the employer's section 125 plan to a new account at their designated HSA custodian. This allows the contributions to be FICA tax exempt. If that custodian does not have good options you can use the same HSA the employee already has or open another HSA account. Then either rollover once per twelve month period, or do as many trustee - trustee transfers to whichever HSA account you choose. A rollover is usually free, but the transfers are often $20 - $25.
  4. There are many threads and the Wiki on HSA account choices.

PFInterest
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Re: What to do with two HSAs?

Post by PFInterest » Fri Nov 09, 2018 8:34 am

Spirit Rider wrote:
Fri Nov 09, 2018 8:34 am
  1. @cmublitz is not correct that HSAs are an extension of the IRA tax code, but is correct that like all tax advantaged accounts they are individual accounts. They can not be rolled over to another individual's account while alive.
  2. Under the HSA rules for married people. If either spouse has an HSA qualifying family HDHP, the other spouse is considered to have one also. The family contribution limit can be allocated in any manner the spouses choose. Therefore, the full contribution can be made to either spouse's accounts.
  3. At a minimum the best option is most likely to be to contribute through payroll deduction through the employer's section 125 plan to a new account at their designated HSA custodian. This allows the contributions to be FICA tax exempt. If that custodian does not have good options you can use the same HSA the employee already has or open another HSA account. Then either rollover once per twelve month period, or do as many trustee - trustee transfers to whichever HSA account you choose. A rollover is usually free, but the transfers are often $20 - $25.
  4. There are many threads and the Wiki on HSA account choices.
good to know.

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jeffyscott
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Re: What to do with two HSAs?

Post by jeffyscott » Fri Nov 09, 2018 9:54 am

colonialrampage wrote:
Fri Nov 09, 2018 3:00 am
Any suggestions for where to move my HSAs? An investing option would be nice, but we do plan on paying all medical expenses out of this account and a decent interest rate option would be fine as well.
I found this helpful: https://thehsareportcard.com
My feeling is the 3 best options are Lively, Further, and HSA Authority.

We spend from our account, but there is excess to invest, since we put in maximum allowed every year. I have not found any saving account type options to be worthwhile. I think we are better off paying $30-36 per year for one of the the 3 options I listed above, in order to be able to invest in treasuries, TIPS, or brokered CDs, if we want total safety.

If/when you are both over 55, you will need two HSAs, if you want to make maximum contributions as there is a $1000 higher limit at that age that requires two accounts to take advantage of.
press on, regardless - John C. Bogle

colonialrampage
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Re: What to do with two HSAs?

Post by colonialrampage » Fri Nov 09, 2018 7:36 pm

Thanks to all for the information.

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