New HSA provider Lively offers investments for $30/yr fee

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Muse94552
Posts: 4
Joined: Thu Apr 26, 2018 12:18 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by Muse94552 » Wed May 02, 2018 1:15 pm

I'm enjoying the boglehead discussion about Lively, and have confirmed I am eligible for a one-time transfer from IRA to HSA. But I hesitate- is anyone ELSE worried that Lively will disappear in a couple of years/be sold or actually fail? :oops:
I realize that Lively deposits are theoretically in SPIC or FDIC insured accounts, but only indirectly. Is my concern unwarranted?

User avatar
jhfenton
Posts: 3308
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: New HSA provider Lively offers investments for $30/yr fee

Post by jhfenton » Wed May 02, 2018 1:35 pm

Muse94552 wrote:
Wed May 02, 2018 1:15 pm
I'm enjoying the boglehead discussion about Lively, and have confirmed I am eligible for a one-time transfer from IRA to HSA. But I hesitate- is anyone ELSE worried that Lively will disappear in a couple of years/be sold or actually fail? :oops:
I realize that Lively deposits are theoretically in SPIC or FDIC insured accounts, but only indirectly. Is my concern unwarranted?
It's possible that Lively will go under and that I'll have to move my account to another provider that I won't like as much. That would be an inconvenience, though, not a disaster. My investments are custodied at TD Ameritrade. Any cash in my Lively HSA account (usually zero) is custodied at Choice Financial bank. Lively going under would not put any of my assets at risk.

The worst part of Lively going under would be what it says about the viability of the business model of the low-cost HSA investment provider.

User avatar
indexfundfan
Posts: 2217
Joined: Tue Feb 20, 2007 11:21 am
Contact:

Re: New HSA provider Lively offers investments for $30/yr fee

Post by indexfundfan » Wed May 16, 2018 8:21 am

Just completed my latest money transfer from my bank to Lively/TDA. This time it took T+4 days for money to appear in TDA for trading, an improvement of one day from my last transfer.
My signature has been deleted.

tenkuky
Posts: 534
Joined: Sun Dec 14, 2014 4:28 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by tenkuky » Wed May 16, 2018 10:45 am

indexfundfan wrote:
Wed May 16, 2018 8:21 am
Just completed my latest money transfer from my bank to Lively/TDA. This time it took T+4 days for money to appear in TDA for trading, an improvement of one day from my last transfer.
To confirm, did you do from an HSA trustee-to-trustee transfer? Or just an individual contribution to Lively?
I was planning (once I start) to do the employer linked HSA provider distribution to me, I deposit check and simultaneously ACH the same amount from checking to Lively. The Lively rep suggested it is seamless and both send me 5498 so I can handle my taxes. Plus, this way no fees vs. $25 for the transfer way.

User avatar
indexfundfan
Posts: 2217
Joined: Tue Feb 20, 2007 11:21 am
Contact:

Re: New HSA provider Lively offers investments for $30/yr fee

Post by indexfundfan » Wed May 16, 2018 11:53 am

tenkuky wrote:
Wed May 16, 2018 10:45 am
indexfundfan wrote:
Wed May 16, 2018 8:21 am
Just completed my latest money transfer from my bank to Lively/TDA. This time it took T+4 days for money to appear in TDA for trading, an improvement of one day from my last transfer.
To confirm, did you do from an HSA trustee-to-trustee transfer? Or just an individual contribution to Lively?
I was planning (once I start) to do the employer linked HSA provider distribution to me, I deposit check and simultaneously ACH the same amount from checking to Lively. The Lively rep suggested it is seamless and both send me 5498 so I can handle my taxes. Plus, this way no fees vs. $25 for the transfer way.
My example was a bank-to-TDA transfer. It is not a trustee-to-trustee direct transfer.

If you are going to deposit the check into your account and ACH the money to Lively, yes, you are going to see the same T+4 days as me before money can be invested at TDA.
My signature has been deleted.

MJR84
Posts: 13
Joined: Sat Sep 02, 2017 11:04 am

Re: New HSA provider Lively offers investments for $30/yr fee

Post by MJR84 » Sun May 20, 2018 9:26 pm

jhfenton wrote:
Wed May 02, 2018 1:35 pm
Muse94552 wrote:
Wed May 02, 2018 1:15 pm
I'm enjoying the boglehead discussion about Lively, and have confirmed I am eligible for a one-time transfer from IRA to HSA. But I hesitate- is anyone ELSE worried that Lively will disappear in a couple of years/be sold or actually fail? :oops:
I realize that Lively deposits are theoretically in SPIC or FDIC insured accounts, but only indirectly. Is my concern unwarranted?
It's possible that Lively will go under and that I'll have to move my account to another provider that I won't like as much. That would be an inconvenience, though, not a disaster. My investments are custodied at TD Ameritrade. Any cash in my Lively HSA account (usually zero) is custodied at Choice Financial bank. Lively going under would not put any of my assets at risk.

The worst part of Lively going under would be what it says about the viability of the business model of the low-cost HSA investment provider.
Naive question: How do we know that, if Lively went out of business, investments made through the Fidelity platform would be safe? It makes perfect sense to me that they would, but (unlike FDIC protections) I don't really understand the mechanics of how a scenario like this would work.

User avatar
MossySF
Posts: 2299
Joined: Thu Apr 19, 2007 9:51 pm
Contact:

Re: New HSA provider Lively offers investments for $30/yr fee

Post by MossySF » Mon May 21, 2018 1:00 am

MJR84 wrote:
Sun May 20, 2018 9:26 pm
Naive question: How do we know that, if Lively went out of business, investments made through the Fidelity platform would be safe? It makes perfect sense to me that they would, but (unlike FDIC protections) I don't really understand the mechanics of how a scenario like this would work.
The accounts are under your name so Lively is just an administrator. For them to access your accounts for their own purposes, they'd need to make some type of fraudulent activity -- say example making up some fake medical bills to then use your funds to pay themselves. SIPC exists for this purpose ... you are protected to up to $500K of assets ($250K cash) against fraud/improper comingling/etc in a brokerage account. (It does not protect you against value drops of the underlying assets.)

financeidiot
Posts: 173
Joined: Sat Dec 24, 2016 12:10 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by financeidiot » Mon May 21, 2018 8:21 am

Switched to Lively a few months ago. I've since lost my HSA eligibility (new employer has no HSA eligible plans) and they've been extremely helpful in navigating how much I need to withdraw and what the rules would be if I get my eligibility back later this year. Best and fastest service I've ever had from a financial institution. For contrast, my old HSA provider would just send me a link to the IRS website and tell me to figure it out.

captpete
Posts: 91
Joined: Mon Nov 17, 2014 1:45 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by captpete » Sat Jun 16, 2018 12:00 pm

Hello,

My wife's employer just started offering HSA HDHP and she is to choose her own HSA custodian. I set her up with Lively to find out that they do not receive direct deposits.

Does anyone on here use lively anyway, by taking the contribution to a savings account then contributing from there to the Lively account?

Thanks for any guidance on this

Pete

Muse94552
Posts: 4
Joined: Thu Apr 26, 2018 12:18 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by Muse94552 » Wed Jun 20, 2018 10:35 am

Apologies if this is the wrong place to ask this question: I read somewhere that California now taxes both the HSA contributions AND, earnings when HSA funds are withdrawn to pay qualified expenses. This changes the calculation for me somewhat as I was planning to make the 'once in a lifetime' trustee to trustee transfer from an IRA to fund the HSA. Can anyone confirm or deny the story on California tax on HSA? Our legislators sure make things complicated at every opportunity.

aristotelian
Posts: 4686
Joined: Wed Jan 11, 2017 8:05 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by aristotelian » Wed Jun 20, 2018 10:53 am

captpete wrote:
Sat Jun 16, 2018 12:00 pm
Hello,

My wife's employer just started offering HSA HDHP and she is to choose her own HSA custodian. I set her up with Lively to find out that they do not receive direct deposits.

Does anyone on here use lively anyway, by taking the contribution to a savings account then contributing from there to the Lively account?

Thanks for any guidance on this

Pete
I have direct deposit set up from my employer to Lively.

Before it was set up I did it manually from my employer custodian.

Muse94552
Posts: 4
Joined: Thu Apr 26, 2018 12:18 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by Muse94552 » Wed Jun 20, 2018 12:32 pm

Just now created a Lively account. There IS a $25fee for 'early' account closure if closed within 12months listed in the Choice Bank Terms, approx page 15. Just wanted to give all a heads-up.
Upon application completion, a popup indicated account setup would take 1-2 days. I did not link existing bank account to this HSA, nor roll an existing HSA into this one.

zeugmite
Posts: 1046
Joined: Tue Jul 22, 2008 11:48 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by zeugmite » Fri Oct 12, 2018 9:33 pm

Looks like, business model fears aside, Lively is the hands down winner, provided you like the TDA commission-free ETF's. RE: how they make money, I don't know -- how much is the expense of bookkeeping an HSA really? Sometimes tech is just much cheaper.

zeugmite
Posts: 1046
Joined: Tue Jul 22, 2008 11:48 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by zeugmite » Sat Oct 13, 2018 12:17 am

Muse94552 wrote:
Wed Jun 20, 2018 12:32 pm
Just now created a Lively account. There IS a $25fee for 'early' account closure if closed within 12months listed in the Choice Bank Terms, approx page 15. Just wanted to give all a heads-up.
Upon application completion, a popup indicated account setup would take 1-2 days. I did not link existing bank account to this HSA, nor roll an existing HSA into this one.
Do the fees start immediately or after money goes in?

ssenneff
Posts: 2
Joined: Sun Jul 08, 2018 3:20 am

Re: New HSA provider Lively offers investments for $30/yr fee

Post by ssenneff » Sat Oct 13, 2018 5:48 pm

Here is a good site to compare HSA's: https://thehsareportcard.com . I'll be rolling over my wife and my HSA's to Avidia Bank. They waive the $2.50/Mo investment fee if the avg monthly balance is greater than $3,000, so I should have no fees at all. A bit weak on investment options, but having VFIAX (Vanguard 500 Index) at a 0.04 ER is good enough. There are a couple of other low cost index funds as well. There are other fees like Overdraft ($30) and outgoing rollover ($25), but not concerning to me.

harvestbook
Posts: 469
Joined: Sat Mar 18, 2017 7:12 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by harvestbook » Sat Oct 13, 2018 8:22 pm

Has anyone actually withdrawn money from Lively? Say, using your account to pay current medical expenses? Is it a smooth process?

I have only seen posts of people putting money in.
I'm not smart enough to know, and I can't afford to guess.

TropikThunder
Posts: 1030
Joined: Sun Apr 03, 2016 5:41 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by TropikThunder » Sat Oct 13, 2018 8:25 pm

ssenneff wrote:
Sat Oct 13, 2018 5:48 pm
Here is a good site to compare HSA's: https://thehsareportcard.com . I'll be rolling over my wife and my HSA's to Avidia Bank. They waive the $2.50/Mo investment fee if the avg monthly balance is greater than $3,000, so I should have no fees at all. A bit weak on investment options, but having VFIAX (Vanguard 500 Index) at a 0.04 ER is good enough. There are a couple of other low cost index funds as well. There are other fees like Overdraft ($30) and outgoing rollover ($25), but not concerning to me.
Avidia sounds pretty good, but there's a reason HSA Report Card didn't rank it among their Top 10 HSA's for investors. Many of us (me included) won't accept having to keep $3,000 in the HSA account to avoid the service fee. I'd gladly accept the $2.50 per month fee to allow me to invest 100% of the money (but at least Avidia gives you the choice). I'd like to think I will make more than $30/year off the $3,000 if I invest it.

TropikThunder
Posts: 1030
Joined: Sun Apr 03, 2016 5:41 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by TropikThunder » Sat Oct 13, 2018 8:40 pm

harvestbook wrote:
Sat Oct 13, 2018 8:22 pm
Has anyone actually withdrawn money from Lively? Say, using your account to pay current medical expenses? Is it a smooth process?

I have only seen posts of people putting money in.
They have a Visa debit card (like most if not all HSA's) so I imagine it would be seamless as long as you have money in the HSA account itself (un-invested).

TIAX
Posts: 1148
Joined: Sat Jan 11, 2014 12:19 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by TIAX » Sat Oct 13, 2018 11:56 pm

harvestbook wrote:
Sat Oct 13, 2018 8:22 pm
Has anyone actually withdrawn money from Lively? Say, using your account to pay current medical expenses? Is it a smooth process?

I have only seen posts of people putting money in.
Bogleheads don't withdraw money from HSAs.

harvestbook
Posts: 469
Joined: Sat Mar 18, 2017 7:12 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by harvestbook » Sun Oct 14, 2018 10:13 am

TIAX wrote:
Sat Oct 13, 2018 11:56 pm
harvestbook wrote:
Sat Oct 13, 2018 8:22 pm
Has anyone actually withdrawn money from Lively? Say, using your account to pay current medical expenses? Is it a smooth process?

I have only seen posts of people putting money in.
Bogleheads don't withdraw money from HSAs.
Plan B is to die perfectly healthy without ever having touched the HSA, but that sounds like a form of market timing.
I'm not smart enough to know, and I can't afford to guess.

ssenneff
Posts: 2
Joined: Sun Jul 08, 2018 3:20 am

Re: New HSA provider Lively offers investments for $30/yr fee

Post by ssenneff » Sun Oct 14, 2018 7:12 pm

TropikThunder wrote:
Sat Oct 13, 2018 8:25 pm
ssenneff wrote:
Sat Oct 13, 2018 5:48 pm
Here is a good site to compare HSA's: https://thehsareportcard.com . I'll be rolling over my wife and my HSA's to Avidia Bank. They waive the $2.50/Mo investment fee if the avg monthly balance is greater than $3,000, so I should have no fees at all. A bit weak on investment options, but having VFIAX (Vanguard 500 Index) at a 0.04 ER is good enough. There are a couple of other low cost index funds as well. There are other fees like Overdraft ($30) and outgoing rollover ($25), but not concerning to me.
Avidia sounds pretty good, but there's a reason HSA Report Card didn't rank it among their Top 10 HSA's for investors. Many of us (me included) won't accept having to keep $3,000 in the HSA account to avoid the service fee. I'd gladly accept the $2.50 per month fee to allow me to invest 100% of the money (but at least Avidia gives you the choice). I'd like to think I will make more than $30/year off the $3,000 if I invest it.
I have to admit that I didn't consider the opportunity cost of not investing the $3K. I tend to keep cash large cash balances in accounts that have outgoing expenses, but $3K is more cash than necessary to cover medical expenses. Thanks for pointing that out.

Angst
Posts: 1847
Joined: Sat Jun 09, 2007 11:31 am

Re: New HSA provider Lively offers investments for $30/yr fee

Post by Angst » Mon Oct 15, 2018 2:30 pm

ssenneff wrote:
Sun Oct 14, 2018 7:12 pm
TropikThunder wrote:
Sat Oct 13, 2018 8:25 pm
ssenneff wrote:
Sat Oct 13, 2018 5:48 pm
Here is a good site to compare HSA's: https://thehsareportcard.com . I'll be rolling over my wife and my HSA's to Avidia Bank. They waive the $2.50/Mo investment fee if the avg monthly balance is greater than $3,000, so I should have no fees at all. A bit weak on investment options, but having VFIAX (Vanguard 500 Index) at a 0.04 ER is good enough. There are a couple of other low cost index funds as well. There are other fees like Overdraft ($30) and outgoing rollover ($25), but not concerning to me.
Avidia sounds pretty good, but there's a reason HSA Report Card didn't rank it among their Top 10 HSA's for investors. Many of us (me included) won't accept having to keep $3,000 in the HSA account to avoid the service fee. I'd gladly accept the $2.50 per month fee to allow me to invest 100% of the money (but at least Avidia gives you the choice). I'd like to think I will make more than $30/year off the $3,000 if I invest it.
I have to admit that I didn't consider the opportunity cost of not investing the $3K. I tend to keep cash large cash balances in accounts that have outgoing expenses, but $3K is more cash than necessary to cover medical expenses. Thanks for pointing that out.
You may well need to do this at your stage in life, but be sure you understand that most Bogleheads intentionally do NOT withdraw from their HSA's up front and instead prefer to leave them intact and growing for future use down the road once they're on Medicare. If you haven't already seen it, be sure to read the BH Wiki re: HSA accounts:

https://www.bogleheads.org/wiki/Health_ ... _of_pocket

bhough
Posts: 60
Joined: Wed Feb 15, 2017 6:53 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by bhough » Mon Oct 15, 2018 3:32 pm

Personal experience here regarding something mentioned above about withdrawing from Lively.

I opened an account with them last year after leaving megacorp. I started a small business and wanted to roll over and fund an HSA. My plan with HSA was not to use the money and use it to extend my pre-tax space, like most of you here do.

However, cash flow in the first year of a business is a little "herky-jerky" to say the least. So I found that I had to use it or a credit card earlier this year when the bill came due on braces for one of the little ones. My wife used the debit card function without a hitch. Highly recommend.
b

jacoavlu
Posts: 524
Joined: Sun Jan 06, 2013 12:06 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by jacoavlu » Thu Oct 18, 2018 12:08 am

Just read through the whole thread as Lively seems to be at or near the top of the list for a Boglehead HSA and next year will be first year I’m HSA eligible.

So I plan to fund the account with a max contribution with Jan 2019 payroll. I’m an owner in a small physician practice (so employer and employee).

Do I understand this correctly?:

I will start an account with Lively. And link my personal checking account.

Lively will provide info that provide to my our payroll folks and they setup ability to fund my account through payroll deduction.

I’ll also setup the TDA account. And the $2.50/mo fee typically would be taken from my linked personal account?

Wondering if I could have our business account linked instead... is it kosher to have the fee covered by an employer?

I know I own the account, my employer does not.

User avatar
jhfenton
Posts: 3308
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: New HSA provider Lively offers investments for $30/yr fee

Post by jhfenton » Thu Oct 18, 2018 7:33 am

jacoavlu wrote:
Thu Oct 18, 2018 12:08 am
I will start an account with Lively. And link my personal checking account.

Lively will provide info that provide to my our payroll folks and they setup ability to fund my account through payroll deduction.
Yes. Once you set up the Lively account, you can find the ACH/direct deposit information for it in your profile. We gave that information to my wife's employer and they push their HSA contribution to it every paycheck. (My employer will only send contributions to their selected custodian, so I have to do periodic transfers.)
jacoavlu wrote:
Thu Oct 18, 2018 12:08 am
I’ll also setup the TDA account. And the $2.50/mo fee typically would be taken from my linked personal account?
Yes. I get an email notice from Lively at the beginning of every month that the fee has been processed, and then I see it deducted from my checking.
jacoavlu wrote:
Thu Oct 18, 2018 12:08 am
Wondering if I could have our business account linked instead... is it kosher to have the fee covered by an employer?
Employers can and often do pay HSA fees.

But I don't know that Lively is set up to manage two linked bank accounts, one for collecting the fee and one for receiving reimbursements or other distributions. Customers typically use the same checking account for both. You can ask Lively customer service. They are very responsive. I've asked for a couple of features that they said they would put on their development roadmap and that they have since rolled out. (I asked for the ability to change my email address online and to request inbound rollovers online--both pretty basic features that were lacking at startup.)

jacoavlu
Posts: 524
Joined: Sun Jan 06, 2013 12:06 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by jacoavlu » Thu Oct 18, 2018 7:59 am

jhfenton wrote:
Thu Oct 18, 2018 7:33 am


But I don't know that Lively is set up to manage two linked bank accounts, one for collecting the fee and one for receiving reimbursements or other distributions. Customers typically use the same checking account for both. You can ask Lively customer service.
Thanks for the help.

Aside from collecting the $2.50/mo investing fee, in my situation where contribution will be made through payroll, what other purpose is the linked bank account for?

harvestbook
Posts: 469
Joined: Sat Mar 18, 2017 7:12 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by harvestbook » Thu Oct 18, 2018 8:40 am

bhough wrote:
Mon Oct 15, 2018 3:32 pm
Personal experience here regarding something mentioned above about withdrawing from Lively.

I opened an account with them last year after leaving megacorp. I started a small business and wanted to roll over and fund an HSA. My plan with HSA was not to use the money and use it to extend my pre-tax space, like most of you here do.

However, cash flow in the first year of a business is a little "herky-jerky" to say the least. So I found that I had to use it or a credit card earlier this year when the bill came due on braces for one of the little ones. My wife used the debit card function without a hitch. Highly recommend.
b
Thanks. Do you have to move the money from investments to a savings account first, or does it draw straight from the invested pool?

Regarding two bank accounts, if employer pays, Lively would still need your account to send distributions (if you choose to reimburse yourself without a debit card.) That's how mine works at Health Savings Administrators (I don't recommend them but they do have a couple of very convenient features.)
I'm not smart enough to know, and I can't afford to guess.

jacoavlu
Posts: 524
Joined: Sun Jan 06, 2013 12:06 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by jacoavlu » Thu Oct 18, 2018 8:51 am

jacoavlu wrote:
Thu Oct 18, 2018 12:08 am
Just read through the whole thread as Lively seems to be at or near the top of the list for a Boglehead HSA and next year will be first year I’m HSA eligible.

So I plan to fund the account with a max contribution with Jan 2019 payroll. I’m an owner in a small physician practice (so employer and employee).

Do I understand this correctly?:

I will start an account with Lively. And link my personal checking account.

Lively will provide info that provide to my our payroll folks and they setup ability to fund my account through payroll deduction.

I’ll also setup the TDA account. And the $2.50/mo fee typically would be taken from my linked personal account?

Wondering if I could have our business account linked instead... is it kosher to have the fee covered by an employer?

I know I own the account, my employer does not.
So I chatted with Shobin and it turns out my question is moot. As a >2% owner of the business I am not eligible to make the contributions pretax, through payroll. I will have to make the contribution on an after tax basis, and get the deduction on my return. Not a big deal. And probably makes things easier anyway because I'll just plan to fund it Jan 1 and be done for the year.

User avatar
sperry8
Posts: 1595
Joined: Sat Mar 29, 2008 9:25 pm
Location: Miami FL

Re: New HSA provider Lively offers investments for $30/yr fee

Post by sperry8 » Thu Oct 18, 2018 9:21 am

How easy is it to transfer/switch from HSA Bank to Lively? Anyone gone through the process?
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

User avatar
sperry8
Posts: 1595
Joined: Sat Mar 29, 2008 9:25 pm
Location: Miami FL

Re: New HSA provider Lively offers investments for $30/yr fee

Post by sperry8 » Thu Oct 18, 2018 9:23 am

Muse94552 wrote:
Wed May 02, 2018 1:15 pm
I'm enjoying the boglehead discussion about Lively, and have confirmed I am eligible for a one-time transfer from IRA to HSA. But I hesitate- is anyone ELSE worried that Lively will disappear in a couple of years/be sold or actually fail? :oops:
I realize that Lively deposits are theoretically in SPIC or FDIC insured accounts, but only indirectly. Is my concern unwarranted?
If you invest all the money via TD Ameritrade - then I'd assume your money would be held by the custodian and if Lively went under you'd still have access to your investments (via a delay while the custodian figures out how to let you access).
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

User avatar
jhfenton
Posts: 3308
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: New HSA provider Lively offers investments for $30/yr fee

Post by jhfenton » Thu Oct 18, 2018 9:30 am

jacoavlu wrote:
Thu Oct 18, 2018 7:59 am
Aside from collecting the $2.50/mo investing fee, in my situation where contribution will be made through payroll, what other purpose is the linked bank account for?
The linked bank account is used for direct contributions, monthly $2.50 fee deductions, and reimbursements.
sperry8 wrote:
Thu Oct 18, 2018 9:23 am
Muse94552 wrote:
Wed May 02, 2018 1:15 pm
I'm enjoying the boglehead discussion about Lively, and have confirmed I am eligible for a one-time transfer from IRA to HSA. But I hesitate- is anyone ELSE worried that Lively will disappear in a couple of years/be sold or actually fail? :oops:
I realize that Lively deposits are theoretically in SPIC or FDIC insured accounts, but only indirectly. Is my concern unwarranted?
If you invest all the money via TD Ameritrade - then I'd assume your money would be held by the custodian and if Lively went under you'd still have access to your investments (via a delay while the custodian figures out how to let you access).
Using a startup does involve heightened business risk. But I agree with sperry8 that the downside would be a matter of inconvenience rather than financial loss. Lively cash deposits are held at Choice Financial Bank and investments are at TD Ameritrade.

Folks moving from HSA Bank with a linked account at TD Ameritrade have done in-kind transfers to a Lively-linked TD Ameritrade account. If Lively ran into financial difficulties, doing the same in the other direction might be a possibility.

In any event, our accounts would be Lively's most valuable asset. They would undoubtedly be "sold" to another custodian as part of the wrap-up plan.
sperry8 wrote:
Thu Oct 18, 2018 9:21 am
How easy is it to transfer/switch from HSA Bank to Lively? Anyone gone through the process?
There have been a few folks make that switch. One or two in this thread, I believe. You can do an in-kind from TD Ameritrade to TD Ameritrade.

Here's one: viewtopic.php?t=228522&start=100#p3591326

dalmatiandan
Posts: 35
Joined: Wed Dec 21, 2016 3:11 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by dalmatiandan » Thu Oct 18, 2018 9:58 am

sperry8 wrote:
Thu Oct 18, 2018 9:21 am
How easy is it to transfer/switch from HSA Bank to Lively? Anyone gone through the process?
I actually completed this exact switch in the last two weeks. It was quite easy.

First, I had it planned so that the October fees ($5.50) for HSA Bank would zero out the funds in HSA Bank itself. I then had every penny in my TD Ameritrade account.

I opened a Lively HSA account. It took a day or two to “finalize” including verifying the trial deposits in my linked checking account. As part of the account opening process, I indicated that I had an account at HSA Bank that I would be transferring. I also sent an email to support@lively.com stating the same.

After the account was finalized, I opened a new TD Ameritrade account through the Lively portal.

Lively sent me a secure email with a TD Ameritrade form that I had to fill out, filling in the HSA Bank - TDA acct number and the Lively HSA - TDA account number, and that it should be a full, in-kind transfer.

Everything got moved over pretty quick, in the next couple days. The HSA Bank - TDA account disappeared from my TDA login, so I assume that’s now closed. I believe one of Lively’s questions at the very beginning was “Are you transferring an account, and would you like us to close it?” or something like that.

I called HSA Bank to close my HSA Bank account, and I did it over the phone in a minute. They didn’t even charge me the $25 closing fee since the account was zeroed out, and I wasn’t adding any new money anyway.

My only qualm is that my DRIP from my bond ETF had posted right in the middle of this process, and that minuscule fractional share was the last thing to get moved over from the HSA Bank - TDA account to the new Lively one, and even then, it wasn’t done in-kind. I now have an extra couple bucks in cash in the TDA account because TDA sold the DRIP fractional share but then didn’t / couldn’t buy it back again in the new account.
If you have DRIP activated, maybe consider plannning around the window of when that will go through.

Happy new Lively customer!
Dan

jacoavlu
Posts: 524
Joined: Sun Jan 06, 2013 12:06 pm

Re: New HSA provider Lively offers investments for $30/yr fee

Post by jacoavlu » Fri Oct 19, 2018 9:31 am

jacoavlu wrote:
Thu Oct 18, 2018 8:51 am
jacoavlu wrote:
Thu Oct 18, 2018 12:08 am
Just read through the whole thread as Lively seems to be at or near the top of the list for a Boglehead HSA and next year will be first year I’m HSA eligible.

So I plan to fund the account with a max contribution with Jan 2019 payroll. I’m an owner in a small physician practice (so employer and employee).

Do I understand this correctly?:

I will start an account with Lively. And link my personal checking account.

Lively will provide info that provide to my our payroll folks and they setup ability to fund my account through payroll deduction.

I’ll also setup the TDA account. And the $2.50/mo fee typically would be taken from my linked personal account?

Wondering if I could have our business account linked instead... is it kosher to have the fee covered by an employer?

I know I own the account, my employer does not.
So I chatted with Shobin and it turns out my question is moot. As a >2% owner of the business I am not eligible to make the contributions pretax, through payroll. I will have to make the contribution on an after tax basis, and get the deduction on my return. Not a big deal. And probably makes things easier anyway because I'll just plan to fund it Jan 1 and be done for the year.
After more reading around HSA contributions, FICA taxes, and S corp ownership only clouded the issue for me, I posted a question over on the WCI forum. To complete the circle and for the benefit of others, I'm quoting spiritrider's clarifying reply below:

from spiritrider:
"Lively is correct that small business owners of pass-thru entities can not receive pre-tax health and welfare benefits. This applies to health insurance premiums and HSA contributions for S-Corp 2% shareholder-employee’s.

However, Lively has made a clear error by omission. You most definitely are able to receive deductions and FICA exemption on these. It just requires s specific detailed process.

1. The S-Corp pays directly or reimburses the health insurance premium and/or makes directly or reimburses the HSA contributions.
2. These after-tax payments are reported on the S-Corp’s Form 1120s Line 7 Officer Compensation.
3. They are also reported on the 2% shareholder-employee’s W-2 Box 1 wages, but NOT Boxes 3 Social Security wages and 5 Medicare wages.
4. The shareholder-employee then reports on their personal Form 1040 the Line 25 HSA deduction and the Line 29 Self-Employed health insurance deduction*.

This effectively makes the health insurance premiums and HSA contributions income and FICA tax exempt.

* You may only take the self-employed health insurance deduction if you are not eligible for a group health insurance plan of you or your spouse’s employer."
Here's a link to the topic for anyone interested: https://www.whitecoatinvestor.com/forum ... ica-taxes/

Post Reply