HSA Bank eliminating investment options

[tj]

Appreciate everyone's helpful commentary in this thread.

Given how painful the process seems to be to regularly move funds from HSA Bank to Fidelity, I think I'm going to just accept the .1% fee and enroll in the Choice program. I'll essentially be starting over from $0 invested in this account so this represents way too little $$$ in yearly fees for me to add another manual monthly / quarterly / yearly financial 'to-do' to my list.

Now for the ~$12k that I have in my Schwab HSA... if I'm keeping new funds in the Choice program rather than sweeping them to Fidelity, the only reason to move my Schwab balance to Fidelity would be if I ever wanted to rebalance my portfolio. I have it 100% in SWTSX and can't imagine wanting to change that anytime in the next decade, at which point I'll likely be at a new employer and can just consolidate my Schwab and HSA Bank accounts into a single Fidelity one at once. I've also confirmed that my Schwab account is still set to reinvest dividends (meaning no risk of them landing in the cash balance and getting swept back over to HSA Bank), so it seems like I can just leave that on autopilot until I do change jobs and consolidate.

Does that sound right? Seems like the right approach for me after reading 13 pages of this thread, but would love a quick sanity check.

Thanks all!

I don't think there's anything wrong with that strategy.

[Feldman]

Also, I was surprised at how quickly Schwab closed AND disabled login on the account with full ACATS transfer to Fidelity. I was waiting to make sure all residual dividends and interest had posted and swept before logging in for a planned final document download. I tried that this morning, and my login was not accepted. Not really a big deal if I can't save the statements or history since it's not a taxable account, but I do have something close to a final statement saved which I uploaded to Fidelity as part of the transfer process. I did ask by email if Schwab could temporarily restore access just for a data download. If not, I'm not going to push any further on that, and lesson learned, I suppose. I didn't realize they would shut down login that quickly upon closure, as some other providers support login and history for literally years on accounts with a zero balance. Word of warning for anyone who still plans to transfer and has not yet pulled the trigger if this is something that matters to you.

Schwab was very helpful by phone this morning re-enabling login for one business day on the closed zero-balance HSA brokerage account to allow me to download statements and other documents for archive. Doubly helpful that they go back to the TD Ameritrade days. Good service!

[wander]

HSA Bank Choice Option seems working fine for me on buy/sell ETFs. There is no fee whatsoever so I find no reason to open another account anywhere.

which options did you choose? I was thinking just do SPAXX?

I am buying SCHB. The money is invested automatically. BTW, I think this thread is misleading. HSABank does not eliminate investment options. It does provide ways to invest.

[cheapsaver]

I liquidated the schwab account and transferred back to HSABank then transferred to Fidelity and closed, but the Schwab account appears to still be open and 20 cents of interest posted. What will happen? Will the 20 cents still be auto transferred back to HSA bank or not since the HSA bank account says closed when I log in? Do I just leave everything alone and let the 20 cents sit in Schwab or do I try to initiate a transfer to Fidelity, but will schwab try to charge a closing fee?

[deltaneutral83]

Just wanted to make sure of some terminology. I'm with Fido HSA, and have employer HSA mandated with HSABank (to get payroll deduction). I am simply setting calendar reminders to go into Fido and transfer monies from HSABAnk about every quarter. Currently, the transfer is posted on the HSABank site as "transfer distribution" and I obviously don't want that to be considered a distribution. Could just be syntax. For what it's worth, the $1.85 fee HSABank charges also says "fee distribution."

[stilllurking]

Just wanted to make sure of some terminology. I'm with Fido HSA, and have employer HSA mandated with HSABank (to get payroll deduction). I am simply setting calendar reminders to go into Fido and transfer monies from HSABAnk about every quarter. Currently, the transfer is posted on the HSABank site as "transfer distribution" and I obviously don't want that to be considered a distribution. Could just be syntax. For what it's worth, the $1.85 fee HSABank charges also says "fee distribution."

I believe transfer distribution is the trustee to trustee transfer and not truly a distribution from the account since you didn't get a hold of it. That's exactly what a couple of my requests to move funds from HSA Bank to Fidelity are shown as. I also am showing that Fidelity doesn't consider these transferred amounts, contributions. I'm glad I don't see a fee distribution in my list.

[deltaneutral83]

Just wanted to make sure of some terminology. I'm with Fido HSA, and have employer HSA mandated with HSABank (to get payroll deduction). I am simply setting calendar reminders to go into Fido and transfer monies from HSABAnk about every quarter. Currently, the transfer is posted on the HSABank site as "transfer distribution" and I obviously don't want that to be considered a distribution. Could just be syntax. For what it's worth, the $1.85 fee HSABank charges also says "fee distribution."

I believe transfer distribution is the trustee to trustee transfer and not truly a distribution from the account since you didn't get a hold of it. That's exactly what a couple of my requests to move funds from HSA Bank to Fidelity are shown as. I also am showing that Fidelity doesn't consider these transferred amounts, contributions. I'm glad I don't see a fee distribution in my list.

Thanks, just wanted to make sure. I go into Fido, upload an HSABAnk statement, select amount, his transfer, and two weeks later it comes in, not too big of a pain. Still miss the auto within HSAbank to Schwab, but this is fine and most people are familiar or have accounts with Fido. I've asked HSABank and there is no $1000 minimum either so I take it to $1 in my HSABAnk account when I do transfer out. I had been told a year or two ago that there's a $1,000 cash minimum in HSABank.

[stilllurking]

I believe transfer distribution is the trustee to trustee transfer and not truly a distribution from the account since you didn't get a hold of it. That's exactly what a couple of my requests to move funds from HSA Bank to Fidelity are shown as. I also am showing that Fidelity doesn't consider these transferred amounts, contributions. I'm glad I don't see a fee distribution in my list.

Thanks, just wanted to make sure. I go into Fido, upload an HSABAnk statement, select amount, his transfer, and two weeks later it comes in, not too big of a pain. Still miss the auto within HSAbank to Schwab, but this is fine and most people are familiar or have accounts with Fido. I've asked HSABank and there is no $1000 minimum either so I take it to $1 in my HSABAnk account when I do transfer out. I had been told a year or two ago that there's a $1,000 cash minimum in HSABank.

I still have a minimum $1k if I want to use their Choice Invest options. I did a test a few weeks ago during a transfer from HSA Bank to Fidelity and was able to get it under $10 so at least now I know it's possible and my payroll contributions can still be deposited there, waiting for the next time I want to submit the forms.

[deltaneutral83]

Thanks, just wanted to make sure. I go into Fido, upload an HSABAnk statement, select amount, his transfer, and two weeks later it comes in, not too big of a pain. Still miss the auto within HSAbank to Schwab, but this is fine and most people are familiar or have accounts with Fido. I've asked HSABank and there is no $1000 minimum either so I take it to $1 in my HSABAnk account when I do transfer out. I had been told a year or two ago that there's a $1,000 cash minimum in HSABank.

I still have a minimum $1k if I want to use their Choice Invest options. I did a test a few weeks ago during a transfer from HSA Bank to Fidelity and was able to get it under $10 so at least now I know it's possible and my payroll contributions can still be deposited there, waiting for the next time I want to submit the forms.

Yep, not much reason at this point to remain investing with HSABank when you can just transfer out a few times a year to the no hassle/no fee Fidelity option.

[RJC]

I still have a minimum $1k if I want to use their Choice Invest options. I did a test a few weeks ago during a transfer from HSA Bank to Fidelity and was able to get it under $10 so at least now I know it's possible and my payroll contributions can still be deposited there, waiting for the next time I want to submit the forms.

Yep, not much reason at this point to remain investing with HSABank when you can just transfer out a few times a year to the no hassle/no fee Fidelity option.

A lot of folks have complained earlier that the HSABank to Fidelity transfer did not go well. Did they fix all the issues?

For this reason, I have started investing with Choice for insurance contributions. For payroll, I send directly to Fidelity.

[stilllurking]

Yep, not much reason at this point to remain investing with HSABank when you can just transfer out a few times a year to the no hassle/no fee Fidelity option.

A lot of folks have complained earlier that the HSABank to Fidelity transfer did not go well. Did they fix all the issues?

For this reason, I have started investing with Choice for insurance contributions. For payroll, I send directly to Fidelity.

I use Fidelity's transfer form (PDF) from their site, complete it and upload it to HSA Bank's Secure Upload system. Works like a charm. Aside from the fact that they cut a physical check and mail it.

[Feldman]

My next concern is that HSA Bank will tire of all this and implement nuisance fees for outgoing trustee-to-trustee transfers. You have to assume that's coming, especially if more and more people do what we're proposing here. I just hope I get my 2025 funding and transfers complete before they do so.

[tj]

^ Yup. People doipng these monthly transfers are really pulling on superman's cape. Great way to nerf the option.

[deltaneutral83]

My next concern is that HSA Bank will tire of all this any implement nuisance fees for outgoing trustee-to-trustee transfers. You have to assume that's coming, especially if more and more people do what we're proposing here. I just hope I get my 2025 funding and transfers complete before they do so.

Probably. I'm not even sure why employers don't go with Fidelity in the fist place since it's free vs HSABank that has a monthly fee. Perhaps Fidelity wouldn't be free if they had to administrate larger companies vs individuals.

[Lyrrad]

Probably. I'm not even sure why employers don't go with Fidelity in the fist place since it's free vs HSABank that has a monthly fee. Perhaps Fidelity wouldn't be free if they had to administrate larger companies vs individuals.

I believe Fidelity charges employers for HSA accounts.

[Feldman]

Not trying to give them ideas, but it just seems likely given their track record and the frequency of transfers folks are discussing here.

I intentionally front-load my HSA contributions and try to max it out in the first couple of pay periods. Therefore, I should have max for a single person in HSA Bank via payroll deduction by early February and only do one transfer out to Fidelity per year.

[healthsaver123]

I did the HSA bank transfer to Fidelity but HSA Bank auto closed my account after the transfer completed. I'm now missing the pass through contributions from GEHA. I called HSA bank and asked them to reopen my account, but the customer support rep I talked to told me that was not possible and that I needed to "make a new account". He then told me how to make a new account by clicking the "open an hsa" link from the main "hsabank.com" website. That link was failing and not working.

Anyways, has anyone else had luck getting HSA Bank to reopen the HSA account for pass through contributions after they closed it? I had to wait on hold for an hour to get that support rep on the line. What about refunding missed pass through contributions? Any suggestions would be appreciated, thanks!

[tj]

I did the HSA bank transfer to Fidelity but HSA Bank auto closed my account after the transfer completed. I'm now missing the pass through contributions from GEHA. I called HSA bank and asked them to reopen my account, but the customer support rep I talked to told me that was not possible and that I needed to "make a new account". He then told me how to make a new account by clicking the "open an hsa" link from the main "hsabank.com" website. That link was failing and not working.

Anyways, has anyone else had luck getting HSA Bank to reopen the HSA account for pass through contributions after they closed it? I had to wait on hold for an hour to get that support rep on the line. What about refunding missed pass through contributions? Any suggestions would be appreciated, thanks!

This is exactly why I don't mess with transferring the geha contributions around. I'll transfer that all out after I seperate.

[cowbman]

There are a few things to know when doing this. I typically leave $1 in the account so it won't close out. Also, when transferring, I start on the Fidelity side and say partial transfer, select cash, then select the amount in the account (minus $1). Works perfectly every time. I usually do it about every other month.

[stilllurking]

There are a few things to know when doing this. I typically leave $1 in the account so it won't close out. Also, when transferring, I start on the Fidelity side and say partial transfer, select cash, then select the amount in the account (minus $1). Works perfectly every time. I usually do it about every other month.

Good to hear that HSA Bank has cleaned up their act and are more prompt with mailing the check to Fidelity. I've been going the other way with taking Fidelity's transfer form and uploading it to HSA Bank. Two transfers have been successful last year. When my employer's contribution comes in shortly, I'll request another bulk transfer and leave a couple bucks to have the account remain open.

[InvisibleAerobar]

What is the preferable way of doing things if I intend to always keep ~$7,500 for medical expenses?

HSA Invest apparently doesn't allow the purchase of any money market index. If I want to move funds from Fidelity back to HSA Bank, is that an option?

ETA, would I be allowed to essentially have three different HSA brokerage accounts, one at Schwab (existing one, but to be drained), one at Fidelity (taking over what I had at Schwab), and the last one at HSA Invest (no money in account, I opened it to check offerings before deciding it's not for me)

[lindalyc]

Those money kept at Fidelity HSA can't be used/distributed for medical expenses already incurred?
thanks

[tj]

Those money kept at Fidelity HSA can't be used/distributed for medical expenses already incurred?
thanks

Of course it can.

[InvisibleAerobar]

Those money kept at Fidelity HSA can't be used/distributed for medical expenses already incurred?
thanks

Of course it can.

Is it a direct disbursement, or would it need to be transferred to the HSA checking account first?

[tj]

Of course it can.

Is it a direct disbursement, or would it need to be transferred to the HSA checking account first?

Why would you need to send it to an HSA checking account? Fidelity gives you a debit card to spend from the HSA. No reason any random withdrawal wouldn't qualify so long as it's for medical purposes.

[InvisibleAerobar]

Is it a direct disbursement, or would it need to be transferred to the HSA checking account first?

Why would you need to send it to an HSA checking account? Fidelity gives you a debit card to spend from the HSA. No reason any random withdrawal wouldn't qualify so long as it's for medical purposes.

Very good to know. Thanks.

In the previous eco-system (HSA Bank + Schwab), brokerage (Schwab) had been separate from banking, alas my question.

Would you know where I can go to read more about the intricacies of the set-up?

[tj]

Why would you need to send it to an HSA checking account? Fidelity gives you a debit card to spend from the HSA. No reason any random withdrawal wouldn't qualify so long as it's for medical purposes.

Very good to know. Thanks.

In the previous eco-system (HSA Bank + Schwab), brokerage (Schwab) had been separate from banking, alas my question.

Would you know where I can go to read more about the intricacies of the set-up?

I'm not sure what you are asking, but I'm sure there are IRS publications on HSA distributions and what records should be kept.

[bmstrong]

The company I work for uses HealthEquity. I wasn't pleased with them either, understatement!, before I found one of these BH threads. My process for the last 3-4 years is to max out the HSA as fast as I can, typically before February, then transfer to Fidelity in one shot, leaving a single penny in the HE account. It's worked very well so far. I control the assets at Fidelity, a 80/20 VT/BNDW split, and I plan leave it until 65.

[lindalyc]

For those of you successfully transfer to Fido HSA from HSA Bank, I saw this mention about filling out Fidelity Transfer of Assets pdf form and uploaded it to HSA Bank's secure document upload feature.
However a call to Fido HSA office says to upload signed form to Fidelity and let Fidelity handles the request.

Which method is the best or simple way to accomplish it?

Thanks in advance.

[534Bc]

Using hsa bank secure upload tab HAS WORKED BETTER FOR ME. It works and is quicker.

I had been using fidelity website for about 4 yrs and have had numerous failures. It's easier, but there's a big problem with hsa bank's faxing capability and a large lag between them receiving the fax and it actually getting to the transfer dept.

[exarkun]

A lot of folks have complained earlier that the HSABank to Fidelity transfer did not go well. Did they fix all the issues?

For this reason, I have started investing with Choice for insurance contributions. For payroll, I send directly to Fidelity.

I use Fidelity's transfer form (PDF) from their site, complete it and upload it to HSA Bank's Secure Upload system. Works like a charm. Aside from the fact that they cut a physical check and mail it.

Anyone have the link to the form handy? I can only find Fidelity's online submission process.

[stilllurking]

I use Fidelity's transfer form (PDF) from their site, complete it and upload it to HSA Bank's Secure Upload system. Works like a charm. Aside from the fact that they cut a physical check and mail it.

Anyone have the link to the form handy? I can only find Fidelity's online submission process.

Here's the link: https://www.fidelity.com/customer-servi ... /all-forms

Click Transfer money/assets INTO an account

Then choose Transfer of Assets

[Wrench]

I received notice today from HSA Bank that my 1099-SA was available. I rolled over the balance to an HSA at Fidelity. The 1099-SA reports the full amount of the rollover, and shows code 1, normal distribution, in box 3. How do I handle that in tax filing so the IRS knows it is a rollover, not a distribution as income or for medical expenses?

Wrench

[Lyrrad]

I received notice today from HSA Bank that my 1099-SA was available. I rolled over the balance to an HSA at Fidelity. The 1099-SA reports the full amount of the rollover, and shows code 1, normal distribution, in box 3. How do I handle that in tax filing so the IRS knows it is a rollover, not a distribution as income or for medical expenses?

Wrench

Take a look at Form 8889.

I think it's pretty easy to understand. See lines 14a and 14b.

The IRS would eventually be able to verify the rollover happened from the Fidelity Form 5498-SA from the year of distribution or the one afterwards. The 5498-SA is not needed for filing.

[lindalyc]

@Lyrrad:

Do you mean we don't need to file 1099-SA at all? Just keep Fidelity's 5498-SA in case IRS challenges it?
or do need to file 8889?

Thanks.

[FullsideCoverman]

@Lyrrad:

Do you mean we don't need to file 1099-SA at all? Just keep Fidelity's 5498-SA in case IRS challenges it?
or do need to file 8889?

Thanks.

I’m not Lyrrad, but I can answer this question.

You need to report your 1099-SA on your tax return. You will do this on Form 8889, which is the form dealing with Health Savings Account. I am assuming that the only distribution from your HSA was this rollover from HSA Bank to Fidelity. If that is the case, you would put the amount on your 1099-A on line 14a of Form 8889, thus reporting this distribution. Then you would put the amount rolled over, which is the same number, on line 14b of Form 8889, indicating that the entire amount was rolled over. The difference between the two (which is zero) goes on line 14c. The zero gets added to your taxable income, which is an easy calculation. Now the distribution is reported properly, and you don’t pay taxes on it, and everyone is happy.

If you’re using software to prepare your taxes, it should figure it out. When you enter your 1099-SA, it should ask you what you did with the money, and you should tell it that it was all rolled over to another account. It was not used to pay medical expenses. The money you rolled over to Fidelity is not considered a contribution. If you tell it that, it should prepare Form 8889 properly.

[lindalyc]

@FullsideCoverman
Thank you so much! really appreciate it.

Linda