The Best HSA

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alter
Posts: 62
Joined: Thu Feb 26, 2015 11:27 pm

The Best HSA

Post by alter » Tue Feb 13, 2018 8:52 pm

I'm going to give you crazy Bogleheads a gift because I have gotten some useful information from your site before.

I'm not affiliated with anyone but myself but I am picky.

I'm a huge HSA fan. (Thank you GW Bush, credit given where due) The HDHP+HSA is the best thing that has ever happened to my health care(and even helps general retirement funds), and I truly believe, that it is the best health care plan in the world and I would not trade it for any other plan and I have run the numbers on it, but thats not what I'm posting about.

I've researched and tried multiple HSA providers in the past, including HSA bank when it was just starting out, and had a bad experience with them. More recently I was using Sterling HSA, which was much better but still heavy on fees.

Elements.org has the best HSA plan in existence that I have seen thus far. TD Ameritrade options like Sterling, but without the quarterly fees. Plus....and a very big plus, the ability to trade covered call options in the HSA, which is mostly unheard of in an HSA.

Also, have a 2,500 balance and you will pay zero maintenance fees for the HSA. In fact the balance in the savings will pay you a half percent, plus whatever you decide to invest in TD Ameritrade. This is by far the best and most maintenance free HSA plans I've ever seen.

It is literally a zero maintenance fee HSA provider plus all TD Ameritrade investment options (VOO, etc), provided you keep a 2,500 balance in savings earing a half percent. To me the holy grail of HSA's.

You are welcome, crazy Bogleheads.
Last edited by alter on Tue Feb 13, 2018 11:26 pm, edited 1 time in total.

mpsz
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Re: The Best HSA

Post by mpsz » Tue Feb 13, 2018 10:51 pm

Don't they charge $25 each time you transfer funds from your HSA checking account to TD Ameritrade?

https://www.whitecoatinvestor.com/forum ... -hsa-fees/
https://www.hsasearch.com/hsa_providers ... financial/

alter
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Re: The Best HSA

Post by alter » Tue Feb 13, 2018 11:00 pm

Yes, they do. That is still lower than HSA bank or Sterling or almost every other HSA providers yearly fees though, and it won't be yearly, its only how often you want to transfer to the investment account. By all means, tell me if you have a better HSA option. I'd love to hear about it.

The point is this the HSA with the lowest fees and best options of any HSA provider, including all TD Ameritrade investments and no maintenance fees if with 2.5k savings. I would love to compare it to anyone elses HSA if you have a better one. I don't think anyone does.

mpsz
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Re: The Best HSA

Post by mpsz » Tue Feb 13, 2018 11:33 pm

As with many things, it depends on individual circumstances. I contribute to my employer's HSA plan and make an annual rollover to my personal HSA account for better investment options.

I am with HSA Bank. I have not had any negative experiences with them. I happily pay them $5.50/month = $66/year and leave between $0 - $70 in the cash account to cover the fees, but they do not require any cash balance.

Elements would cost me $25/year for the transfer, plus I would make $12.50/yr in interest on $2,500 at 0.5%. However, there is also the opportunity cost of leaving $2,500 in cash earning a relatively low interest rate.

For simplicity, I'll assume HSA Bank earns 0% (it basically does) and consider the cash drag to be $2,400 to account for the small cash balance I keep at HSA Bank. To determine the break-even, we can use:
$66 = $25.00 - $12.50 + (x * $2400)
x = 2.23%

So for an individual who uses their HSA as an investment account, if their investments earn 2.23% or more each year, they are better off at HSA Bank.

The new kid on the block is Lively for $30/yr and also has no minimum cash balance requirement.
$30 = $25.00 - $12.50 + (x * $2400)
x = 0.73%

That being said, I think Elements is a good option and I'm happy it works for you, but I don't think it's the clear winner. It's certainly not fee-free for many people. I can't speak to covered calls; I'm not sure if HSA Bank, Lively, or any of the other HSA providers offering TDA accounts offer this.

alter
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Re: The Best HSA

Post by alter » Tue Feb 13, 2018 11:54 pm

You've already proven that Elements is better. $66/ year for HSA Bank.

Elements with $2500 deposit = $12.5 interest $25 yearly transfer to investment account = $12.50 yearly fee with one transfer to investment account

These amounts are basically guaranteed, and the market does not affect them at all. I personally will not need to transfer to investment account every year so for me its more like $0 because I would transfer to the investment account every 2 years, making it $0 per year fees.

HSA bank definitely used to require a minimum balance to invest, even if thats not the case anymore, they are STILL way more expensive than Elements with fewer options.

Great, don't use the $2500 that is earning $12.50 per year as a factor, invest it instead in a bank that charges you $66/year. Invest it in something that can lose money. That is your choice. My bank charges me $0 in recurring fees and pays me interest, and allows me to sell covered call options every month generating income. HSA bank charging $66 per year guaranteed recurring fees is alot compared to my $0 recurring fees, with the added benefit of generating covered call income monthly. But to each his own.

Let me put it do you this way, in case you did not comprehend my arguments. Even if you had a zero dollar balance in Elements savings and used TD Ameritrade investments, its still cheaper than HSA Bank. $4/mo vs $5.50/mo. There is only one clear winner here. HSA Bank lost.
Last edited by alter on Wed Feb 14, 2018 12:40 am, edited 3 times in total.

athan
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Re: The Best HSA

Post by athan » Wed Feb 14, 2018 12:11 am

Just throwing it out there...I use BenefitWallet.

After a $1,000 minimum in banking account, you can invest in low cost Institutional Vanguard funds. The only fee I pay is $2.90 per month.

I am a big fan since this account is what got me started as a Boglehead. Back in 2013 I set up this account through an employer, and started researching investing in an HSA account. I randomly went down the list of funds offerred and saw the expense ratios. I must have been born part-boglehead, because I instinctively realized that the lower expenses made more sense.

I then googled Vanguard, and the result changed my life. I found bogleheads and started my road to financial success!

I will forever know that BenefitWallet is the real best HSA :P

alter
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Re: The Best HSA

Post by alter » Wed Feb 14, 2018 12:19 am

Sorry Athan, but $2.90 per month and no TD Ameritrade+covered call options isn't the best HSA.

2.9/mo = $34.80/year. With Elements I pay zero.

Just out of curiosity, what is the symbol of your Vanguard fund and it's expense ratio?

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tfb
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Re: The Best HSA

Post by tfb » Wed Feb 14, 2018 1:37 am

alter wrote:
Tue Feb 13, 2018 8:52 pm
I'm going to give you crazy Bogleheads a gift because I have gotten some useful information from your site before.
Crazy Bogleheads already knew it a long time ago. Here's a thread from 2014, before Elements was known as Elements. You can probably find even earlier threads. Only being better than HSA Bank doesn't make it the best HSA.

viewtopic.php?t=149588
Harry Sit, taking a break from the forums.

ivk5
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Re: The Best HSA

Post by ivk5 » Wed Feb 14, 2018 3:20 am

Best for you maybe. A search would have found lots of relevant "Best HSA" threads - no need for a new one and far from obvious that Elements is going to be "best" for most investors.

$2500 stuck at 0.5% is a lot of cash drag. Back of the napkin, at long term avg expected market return of 5.5%, opportunity cost may be on the order of ~$125/yr. Per-transfer fees kill flexibility.

I prefer Lively, $30/yr in fees with unlimited transfers to TD Ameritrade investment acct and no cash drag.

Others discussed here

wow!howmuch?
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Re: The Best HSA

Post by wow!howmuch? » Wed Feb 14, 2018 5:04 am

Due to advice from a great member on this board I switched from Select Account (1.15% interest that was NOT FDIC insured, $4 a month maint fees) to a great Credit Union Connexus with NCUA insured $2 a month maintain fee AND 2% interest on my over $15,000 balance. This is our “rollover” HSA that I just plan on having cash ready. My work HSA that I’m maxing for family is invested( and I like there fund options)


Best!? Who knows.....just having an HSA and putting money in it is doing better than most I bet.
"Gold is warm and contains something of the sun". --Saint Hildegard of Bingen (1098-1179)

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jhfenton
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Re: The Best HSA

Post by jhfenton » Wed Feb 14, 2018 5:59 am

ivk5 wrote:
Wed Feb 14, 2018 3:20 am
Best for you maybe. A search would have found lots of relevant "Best HSA" threads - no need for a new one and far from obvious that Elements is going to be "best" for most investors.

$2500 stuck at 0.5% is a lot of cash drag. Back of the napkin, at long term avg expected market return of 5.5%, opportunity cost may be on the order of ~$125/yr. Per-transfer fees kill flexibility.

I prefer Lively, $30/yr in fees with unlimited transfers to TD Ameritrade investment acct and no cash drag.

Others discussed here
+1 In making comparisons, I assess a cash-drag cost equal to the difference with a typical bond fund, so 2.5% - 0.5% = 2% * $2,500 = $50. Add in the $25 transfer fee and you’re at $75 per year. Since I also do 4 transfers per year from my employer HSA, I’d also have to factor in either increased cash drag in my employer HSA from letting more cash accumulate or additional $25 transfer fees.

I’ll stick with $30 per year, period, at Lively, paid from outside the HSA to boot.

alter
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Re: The Best HSA

Post by alter » Wed Feb 14, 2018 11:47 am

ivk5 wrote:
Wed Feb 14, 2018 3:20 am
Best for you maybe. A search would have found lots of relevant "Best HSA" threads - no need for a new one and far from obvious that Elements is going to be "best" for most investors.

$2500 stuck at 0.5% is a lot of cash drag. Back of the napkin, at long term avg expected market return of 5.5%, opportunity cost may be on the order of ~$125/yr. Per-transfer fees kill flexibility.

I prefer Lively, $30/yr in fees with unlimited transfers to TD Ameritrade investment acct and no cash drag.

Others discussed here
I'll give you that $30/yr with unlimited transfers and if there are no quarterly TD Ameritrade fees, is pretty good, however, do they allow covered call selling?

Also that $30 fee is a guaranteed loss per year and a recurring fee. Still, that is not bad, if you are someone who doesn't want the $2500 only generating a riskless half percent and dont care about CC options.

I just prefer zero maintenance fees. Especially if one loses their job and/or retires early. No more money going in, so transfer fees don't matter as much, and one wants to cut recurring expenses down as small as possible. I just consider that $2500 like a "stable value fund" allocation of the HSA portfolio in exchange for the half percent interest on it along with no fees. Thanks for this info though!

jadedfalcons
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Re: The Best HSA

Post by jadedfalcons » Wed Feb 14, 2018 2:39 pm

Saturna allows me to make one trade a year for $14.95, no other fees. No cash drag. If I want to do a Vanguard fund, it's $24.95. Works great for my purposes.

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jhfenton
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Re: The Best HSA

Post by jhfenton » Wed Feb 14, 2018 3:25 pm

alter wrote:
Wed Feb 14, 2018 11:47 am
I'll give you that $30/yr with unlimited transfers and if there are no quarterly TD Ameritrade fees, is pretty good, however, do they allow covered call selling?

Also that $30 fee is a guaranteed loss per year and a recurring fee. Still, that is not bad, if you are someone who doesn't want the $2500 only generating a riskless half percent and dont care about CC options.

I just prefer zero maintenance fees. Especially if one loses their job and/or retires early. No more money going in, so transfer fees don't matter as much, and one wants to cut recurring expenses down as small as possible. I just consider that $2500 like a "stable value fund" allocation of the HSA portfolio in exchange for the half percent interest on it along with no fees. Thanks for this info though!
I don't see any sign that you can apply to have the TD Ameritrade account approved for options. So I would say no on covered calls.

But I have no interest in selling covered calls in my HSA. It's only a $50K account at this point, a small percentage of our portfolio. If I wanted to hedge or generate income with options, I would do it in our much larger accounts.

I agree with you on recurring fees, but $2,500 kept in cash at a below-market 0.5% rate is a recurring fee. Even compared to a riskless high-yield savings account at 1.5%, you're sacrificing $2,500 x (1.5% - 0.5%) = $25 for the privilege of the investing the rest of your money. And in my retirement accounts, I would not choose high-yield savings. So my basis for comparison would be a 2.0-2.5% treasury fund yield.

I'm happy you have found an option that works for you.

alter
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Re: The Best HSA

Post by alter » Wed Feb 14, 2018 3:31 pm

jhfenton wrote:
Wed Feb 14, 2018 3:25 pm
alter wrote:
Wed Feb 14, 2018 11:47 am
I'll give you that $30/yr with unlimited transfers and if there are no quarterly TD Ameritrade fees, is pretty good, however, do they allow covered call selling?

Also that $30 fee is a guaranteed loss per year and a recurring fee. Still, that is not bad, if you are someone who doesn't want the $2500 only generating a riskless half percent and dont care about CC options.

I just prefer zero maintenance fees. Especially if one loses their job and/or retires early. No more money going in, so transfer fees don't matter as much, and one wants to cut recurring expenses down as small as possible. I just consider that $2500 like a "stable value fund" allocation of the HSA portfolio in exchange for the half percent interest on it along with no fees. Thanks for this info though!
I don't see any sign that you can apply to have the TD Ameritrade account approved for options. So I would say no on covered calls.

But I have no interest in selling covered calls in my HSA. It's only a $50K account at this point, a small percentage of our portfolio. If I wanted to hedge or generate income with options, I would do it in our much larger accounts.

I agree with you on recurring fees, but $2,500 kept in cash at a below-market 0.5% rate is a recurring fee. Even compared to a riskless high-yield savings account at 1.5%, you're sacrificing $2,500 x (1.5% - 0.5%) = $25 for the privilege of the investing the rest of your money. And in my retirement accounts, I would not choose high-yield savings. So my basis for comparison would be a 2.0-2.5% treasury fund yield.

I'm happy you have found an option that works for you.
I actually still think Elements is the best, I'm a CC seller and the CC generates far more than the $2500 yielding 2%, or even if it yielded 8% (not having CC to me would be another recurring fee if I use your argument) , but I can see why some might find your provider good.

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cookymonster
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Re: The Best HSA

Post by cookymonster » Wed Feb 14, 2018 3:34 pm

jadedfalcons wrote:
Wed Feb 14, 2018 2:39 pm
Saturna allows me to make one trade a year for $14.95, no other fees. No cash drag. If I want to do a Vanguard fund, it's $24.95. Works great for my purposes.
It's even cheaper than that if you buy a NTF fund. I bought one with an ER of 0.21%. The higher ER means $6 in extra costs this year. No other fees or cash drag. When the balance builds up, I'll move it to a Vanguard or fidelity option.

Agree with others that the cash drag is a hidden fee.

TropikThunder
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Re: The Best HSA

Post by TropikThunder » Wed Feb 14, 2018 8:39 pm

alter wrote:
Tue Feb 13, 2018 8:52 pm
I'm going to give you crazy Bogleheads a gift because I have gotten some useful information from your site before.

I'm not affiliated with anyone but myself but I am picky.

I'm a huge HSA fan. (Thank you GW Bush, credit given where due) The HDHP+HSA is the best thing that has ever happened to my health care(and even helps general retirement funds), and I truly believe, that it is the best health care plan in the world and I would not trade it for any other plan and I have run the numbers on it, but thats not what I'm posting about.

I've researched and tried multiple HSA providers in the past, including HSA bank when it was just starting out, and had a bad experience with them. More recently I was using Sterling HSA, which was much better but still heavy on fees.

Elements.org has the best HSA plan in existence that I have seen thus far. TD Ameritrade options like Sterling, but without the quarterly fees. Plus....and a very big plus, the ability to trade covered call options in the HSA, which is mostly unheard of in an HSA.

Also, have a 2,500 balance and you will pay zero maintenance fees for the HSA. In fact the balance in the savings will pay you a half percent, plus whatever you decide to invest in TD Ameritrade. This is by far the best and most maintenance free HSA plans I've ever seen.

It is literally a zero maintenance fee HSA provider plus all TD Ameritrade investment options (VOO, etc), provided you keep a 2,500 balance in savings earing a half percent. To me the holy grail of HSA's.

You are welcome, crazy Bogleheads.
This thread reads like a used car sales pitch.

Elements: $0 maintenance fee if I hold $2,500 hostage in cash, earning $12.50 in interest. $25 per transfer to move money to TDA brokerage.
Lively: $30/yr maintenance fee, no hostage account, no transfer fee, same TDA brokerage.

I'll take Lively. The $2,500 that Elements would otherwise hold hostage will earn way more at TDA than the $30 Lively maintenance fee if I'm allowed to invest it. Plus, most people get monthly contributions to their HSA from their employer (plus add their own contributions by payroll deduction to save on FICA taxes) so the $25 transfer fee is a deal-breaker because the choice becomes either do multiple transfers (quarterly?) and pay $25 each time, OR park even more money in the cash account and do a transfer only once a year. Again, money lost to either higher fees ($25 each time?!?) or cash drag from waiting to transfer. And finally, I don't care in the slightest about not being able to write covered calls, and I highly doubt many others on this forum do either. So, clearly Elements.org is not the best HSA plan in existence, not even close.
Of course, that's my opinion, for my situation, YMMV. But I didn't start the "best ever" claims. :wink:

Oh, and VOO is not a commission-free ETF on TDA any more, so you left out the $6.95 trading fee for that.

athan
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Re: The Best HSA

Post by athan » Wed Feb 14, 2018 9:32 pm

alter wrote:
Wed Feb 14, 2018 12:19 am
Sorry Athan, but $2.90 per month and no TD Ameritrade+covered call options isn't the best HSA.

2.9/mo = $34.80/year. With Elements I pay zero.

Just out of curiosity, what is the symbol of your Vanguard fund and it's expense ratio?
VITSX 0.04
VSMAX 0.06

TropikThunder
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Re: The Best HSA

Post by TropikThunder » Wed Feb 14, 2018 9:45 pm

alter wrote:
Wed Feb 14, 2018 12:19 am
With Elements I pay zero.
Look at it this way: one transfer per year is $25, which pro-rates to $2/month. That's not zero.

alter
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Re: The Best HSA

Post by alter » Thu Feb 15, 2018 12:13 am

TropikThunder wrote:
Wed Feb 14, 2018 9:45 pm
alter wrote:
Wed Feb 14, 2018 12:19 am
With Elements I pay zero.
Look at it this way: one transfer per year is $25, which pro-rates to $2/month. That's not zero.
It's zero recurring fees. And the 2500 balance pays for half of the transfer fee, I don't transfer every year, and I make FAR more selling CC's than the "cash-drag" costs me, so I guess I'll invent a new term here and say the "No-covered-call-drag" from not having the account, would cost me hundreds more than paying the transfer fee. My "No-covered-call" drag costs me a lot more than your "cash-drag" and transfer fee. Elements for the WIN :D

seawolf21
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Re: The Best HSA

Post by seawolf21 » Thu Feb 15, 2018 11:54 am

There is no “best” HSA as people have different needs.

Select account is only $1k minimum in HSA while the rest can go to Schwab account. Schwab commission is lower than TD for equity/ETF. No transfer fees. Select Account charges $12-$18 fee per year. On paper SelectAccount can charge up to $18 per year but in reality they’ve only charged $6 last full year. Schwab does not charge annual fees. If you are actively trading, the Schwab commission be lower than TD per trade.

Other people may want to transfer to brokerage several times per year. Lively and SelectAccount having no per transfer fee would cost less for them.

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