Federal Employees/HSA Bank?

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TresBelle65
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Joined: Sun Apr 12, 2015 2:44 pm

Federal Employees/HSA Bank?

Post by TresBelle65 »

Does anyone know whether, as a federal employee, I have the option to use a different bank, other than HSA Bank to hold my HSA?

My contributions are done through payroll, so I have to assume it's a bank the feds already have an agreement to work with?

Just really unsatisfied with how HSABank runs their business, not customer friendly at all.

thanks
Soon2BXProgrammer
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Joined: Mon Nov 24, 2014 11:30 pm

Re: Federal Employees/HSA Bank?

Post by Soon2BXProgrammer »

TresBelle65 wrote: Sat Oct 17, 2020 7:10 am Does anyone know whether, as a federal employee, I have the option to use a different bank, other than HSA Bank to hold my HSA?

My contributions are done through payroll, so I have to assume it's a bank the feds already have an agreement to work with?

Just really unsatisfied with how HSABank runs their business, not customer friendly at all.

thanks
See what HSABank charges for a "partial transfer" to another bank. If free, then just periodically have them send almost your whole account to some other institution . (Lifely or Fidelity)
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wander
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Re: Federal Employees/HSA Bank?

Post by wander »

TresBelle65 wrote: Sat Oct 17, 2020 7:10 am Does anyone know whether, as a federal employee, I have the option to use a different bank, other than HSA Bank to hold my HSA?

My contributions are done through payroll, so I have to assume it's a bank the feds already have an agreement to work with?

Just really unsatisfied with how HSABank runs their business, not customer friendly at all.

thanks
I think the passthough money will be deposited to HSABank regardless. You can use different bank to contribute your own money to.
Helo80
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Re: Federal Employees/HSA Bank?

Post by Helo80 »

1. No, you are under no obligation to continue to use HSA Bank. I'm guessing that you have GEHA, and GEHA uses HSABank to provide your passthrough contribution that funds your HSA.

2. The feds have no formal agreement with HSA Bank as a whole. If you were under a different HDHP, you would not necessarily be using HSA Bank. E.g. Aetna uses PayFlex and Payflex was decent until they started raising HSA fees on brokerage accounts.

My recommendations:
1. Open a Fidelity HSA.
2. Contact your payroll office and have them deposit your HSA deduction to your new Fidelity account.
3. Payroll *should* have no issues doing this as much like IRAs, you're free to choose which broker you prefer to do business with up to IRS limits.
4. If Payroll scoffs or insists this cannot be done, escalate the issue. Really, it's simply a matter of where to DD the money to when payroll is run. That being said, sometimes payroll is under the impression, like you, that b/c you have GEHA, you must use HSABank.
5. If you are told "no", simply end your HSA contribution.
6. Write a personal check every month or year to Fidelity and then deduct that off your taxes. (Note, you will pay the OASDI taxes, whereas if you deduct from payroll, you forego those taxes).

In terms of the previous poster's comments:
1. It is possible to do a transfer, but here's what I would do:
2. Contact HSA Bank and request a full withdrawal of the amount for "Medical operational expenses" or something stupid.
3. Go to fidelity and get the form to do a HSA fund rollover into your account.
4. Once HSABank ACH transfers the amount into your bank, write a check to Fidelity for that amount with said form.
5. Boom, you just did a HSA rollover without HSABank skimming some off the top.

(Note: rollovers take forever b/c the losing institution are slow as molasses about processing them when they're "losing" that money..... If you simply tell them you need the money for medical expenses... it goes much faster and you can have the money usually within 48 hours).

Also, the rollover method I mentioned above can be done once per 365 days (not once per year).... So, if you do it today, October 17, 2021, is the next time you'd be able to do it.

I don't care for HSA bank either, and just tell the pass through money accumulate in HSA Bank, and then wipe it out once a year and send it to Fidelity.
aristotelian
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Re: Federal Employees/HSA Bank?

Post by aristotelian »

+1 to above. A lot of people mistakenly think their HSA is like their 401k and they are stick with it. I am not a federal employee but our payroll is able to direct deposit my employer contribution to Fidelity HSA. If they say no, keep trying til you get someone who says yes.

Very worst case scenario, you can withdraw the balance of your HSA each year and redeposit to Fidelity within 60 days.
leviathan
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Joined: Tue Jul 09, 2019 3:03 pm

Re: Federal Employees/HSA Bank?

Post by leviathan »

I transferred the balance from HSA bank to Fidelity HSA, initiated from my fidelity account. I left a few cents at HSA bank. There was no fee, and it was quick (about a week). I’ll do that again later.
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grabiner
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Re: Federal Employees/HSA Bank?

Post by grabiner »

While you can transfer your HSA money from HSA Bank to another provider, you may not need to. As long as you keep your federal health insurance, the fees are likely to be waived, and you can buy anything in the TD Ameritrade brokerage account.
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RJC
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Re: Federal Employees/HSA Bank?

Post by RJC »

TresBelle65 wrote: Sat Oct 17, 2020 7:10 am Does anyone know whether, as a federal employee, I have the option to use a different bank, other than HSA Bank to hold my HSA?

My contributions are done through payroll, so I have to assume it's a bank the feds already have an agreement to work with?

Just really unsatisfied with how HSABank runs their business, not customer friendly at all.

thanks
What issues are you having?

I started using HSA Bank this year and haven't had any problems. They automatically sweep the funds to TD Ameritrade so we don't really interact with them.
Ignis
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Joined: Wed Jul 04, 2012 5:29 pm

Re: Federal Employees/HSA Bank?

Post by Ignis »

I’m also curious what issues you are having, as I’ve had an HSA Bank HSA (also GEHA) for 5 years now with no issues.
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