New to HSA's - A Couple of Questions

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SoDakJeff
Posts: 81
Joined: Mon Mar 13, 2017 11:48 am

New to HSA's - A Couple of Questions

Post by SoDakJeff » Wed Jan 10, 2018 2:03 pm

I went on my wife's health insurance this year as a bridge until I get Medicare next year. We went with the HD/HSA plan, and I don't feel like I'm off to a very good start. Before I start complaining to somebody, I was wondering if you could tell me if the issues I've got are common with HSA's or not, and if I have some alternatives.

The literature we got from her employer says the account will be set up at HealthcareBank, a division of Bell Bank. Never heard of 'em, and apparently there's no way to access our account info from them. The only way to interact with our account is through my wife's employer's website, and frankly, the site is horrible. Her first payday is on 1/12, but right away on 1/2 I transferred $3900 from our MMF to the HSA and selected my investment mix (they do have a good selection of Vanguard index funds). I go to the employer website a few days later and see that $2000 was put into a Cash account and only $1900 was put into investments. The site gives me no indication of what kind of cash account this is, except to say that it's an interest earning account. Question 1: Is this cash account normal or mandatory for an HSA? We plan to pay out of pocket for everything, as we're in pretty good health and don't anticipate anything other than minor/routine medical expenses (knock wood). I'd prefer the whole thing was working in the investment accounts. Question 2: I thought I saw a reference to this in another thread here, but can't locate it - Am I locked into keeping our HSA at the current location or can it be moved to someplace that I might find more "user friendly"? Would that be more trouble than it's worth?

Thanks for your help on this.

sailaway
Posts: 942
Joined: Fri May 12, 2017 1:11 pm

Re: New to HSA's - A Couple of Questions

Post by sailaway » Wed Jan 10, 2018 2:11 pm

Many HSAs have liquid assets requirements, so that could be what you are seeing.

As for which company to use...one of the benefits of staying with the company chosen by your employer is that payroll deductions to HSA are FICA exempt. You have foregone most of this benefit but contributing the majority of the HSA upfront out of existing funds. With our HSA, the employer is also paying the account fees for us. Outside of these benefits, I believe the only other is ease of transactions: if you are doing small payroll deductions all year, they may be required to be deposited into the company account then rolled over to the institution you choose.

Tal-
Posts: 464
Joined: Fri Apr 22, 2016 10:41 pm

Re: New to HSA's - A Couple of Questions

Post by Tal- » Wed Jan 10, 2018 4:59 pm

sailaway wrote:
Wed Jan 10, 2018 2:11 pm
the benefits ... is that payroll deductions to HSA are FICA exempt. You have foregone most of this benefit but contributing the majority of the HSA upfront out of existing funds.
I've never paid a HSA payment from existing funds, and honestly, didn't even know that this was possible. With that said, can the OP reconcile the HSA contribution when filing their 2018 taxes? They would miss out on some of the benefits, but at least it would be exempt from federal taxes.
Debt is to personal finance as a knife is to cooking.

sailaway
Posts: 942
Joined: Fri May 12, 2017 1:11 pm

Re: New to HSA's - A Couple of Questions

Post by sailaway » Wed Jan 10, 2018 5:07 pm

Tal- wrote:
Wed Jan 10, 2018 4:59 pm
sailaway wrote:
Wed Jan 10, 2018 2:11 pm
the benefits ... is that payroll deductions to HSA are FICA exempt. You have foregone most of this benefit but contributing the majority of the HSA upfront out of existing funds.
I've never paid a HSA payment from existing funds, and honestly, didn't even know that this was possible. With that said, can the OP reconcile the HSA contribution when filing their 2018 taxes? They would miss out on some of the benefits, but at least it would be exempt from federal taxes.
It is what people do when they have an HSA on the exchange. As I understand, this can only be done as a part of payroll. You can't usually get a FICA refund...

curmudgeon
Posts: 1939
Joined: Thu Jun 20, 2013 11:00 pm

Re: New to HSA's - A Couple of Questions

Post by curmudgeon » Wed Jan 10, 2018 6:11 pm

When I was working, my HSA was accessed through the insurance company website. A bit awkward, but manageable. The default model did set a $2K cash component (maybe because the typical non-boglehead needs a cushion like that for medical expenses with a HDHP). As others have noted, saving on FICA is a possible incentive for contributing via payroll deduction.

You can have an HSA at any provider, but it is not a widespread financial services business. Do a search in the forum for previous threads.

I am retired now, and have an ACA HSA plan. My work HSA transitioned to HSABank, which has been reasonable to use (though I have to pay the fees, about $60/yr, myself now). We also have a HSA for my wife (to get the last $1000 in contribution space) which we keep at our local credit union (has only low interest savings option, but no fees). We draw our medical expenses for both of us against the CU account.

Traveler
Posts: 815
Joined: Fri Aug 30, 2013 9:07 pm

Re: New to HSA's - A Couple of Questions

Post by Traveler » Wed Jan 10, 2018 8:39 pm

My HSA is through Optum Bank. Their website is user friendly and the investment options for my account are good. I do have to keep $2000 in cash (I'm not sure it even earns savings account interest).

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