Do I have to use my employer's HSA provider?
July 22, 2016 2:31 PM Subscribe
Ever since being introduced to the wonderful world of HSAs and FSAs, I have been moved around from one provider to another every few months due to various life & work upheavals. Now that I have an HSA it's especially annoying because that is my money, and I want to manage it with the provider of my choice.
My latest HSA account was managed by Wells-Fargo and I was happy about that because I like their web interface. The other ones I have been forced to use in the past have just been a pain to deal with. I just got a notification that they're selling off their HSA business and my account will now be managed by someone else. Because of various ongoing health issues this is not something I have to deal with infrequently so I just find it very irritating to have our payment info spread out all over these different logins and to have to learn & remember different systems all the time for where my money is.
I know I can/should print out the records myself yes but this isn't what I'm asking.
What I'm asking is can I set up my own (legal, official) HSA account that never moves? I know that my employer will only deposit the $ into the account provider of their choosing but:
A. Can I change that?
B. If I can't change that, can I just transfer the money myself?
C. Anyone ever done this?
My latest HSA account was managed by Wells-Fargo and I was happy about that because I like their web interface. The other ones I have been forced to use in the past have just been a pain to deal with. I just got a notification that they're selling off their HSA business and my account will now be managed by someone else. Because of various ongoing health issues this is not something I have to deal with infrequently so I just find it very irritating to have our payment info spread out all over these different logins and to have to learn & remember different systems all the time for where my money is.
I know I can/should print out the records myself yes but this isn't what I'm asking.
What I'm asking is can I set up my own (legal, official) HSA account that never moves? I know that my employer will only deposit the $ into the account provider of their choosing but:
A. Can I change that?
B. If I can't change that, can I just transfer the money myself?
C. Anyone ever done this?
Best answer: What I'm asking is can I set up my own (legal, official) HSA account that never moves?
Yes, so long as you have a qualified high deductible health care plan (which likely you do right now, since you have an HSA now) and do not exceed the contribution limits.
It is likely your employer pays for maintenance fees for your employer-provided HSA. You will likely have to pay those fees yourself at your chosen HSA (for instance, Wells Fargo charges something like $5/month for HSA service)
A. Can I change [your employer to deposit money into a different provider]?
Only if your employer agrees to; they are under no requirement to. They likely do not want to have agreements with two different HSA providers unless they need to.
B. If I can't change that, can I just transfer the money myself?
Yes, you can create your own HSA and fund it yourself. However, this will now be a post-tax deduction, not a pre-tax deduction. You will get your income tax back when you file, but you will not get your FICA (Social Security/Medicare) tax back, so the money in the HSA will "cost more" for you.
A better solution would be to periodically transfer your money from your employer's HSA to your chosen HSA, which keeps all money as pre-tax.
C. Anyone ever done this?
I have not and I have not heard of this being financially advantageous to anyone.
posted by saeculorum at 2:53 PM on July 22, 2016 [1 favorite]
Yes, so long as you have a qualified high deductible health care plan (which likely you do right now, since you have an HSA now) and do not exceed the contribution limits.
It is likely your employer pays for maintenance fees for your employer-provided HSA. You will likely have to pay those fees yourself at your chosen HSA (for instance, Wells Fargo charges something like $5/month for HSA service)
A. Can I change [your employer to deposit money into a different provider]?
Only if your employer agrees to; they are under no requirement to. They likely do not want to have agreements with two different HSA providers unless they need to.
B. If I can't change that, can I just transfer the money myself?
Yes, you can create your own HSA and fund it yourself. However, this will now be a post-tax deduction, not a pre-tax deduction. You will get your income tax back when you file, but you will not get your FICA (Social Security/Medicare) tax back, so the money in the HSA will "cost more" for you.
A better solution would be to periodically transfer your money from your employer's HSA to your chosen HSA, which keeps all money as pre-tax.
C. Anyone ever done this?
I have not and I have not heard of this being financially advantageous to anyone.
posted by saeculorum at 2:53 PM on July 22, 2016 [1 favorite]
Response by poster: Yes this is what I want to do, I didn't phrase it clearly:
A better solution would be to periodically transfer your money from your employer's HSA to your chosen HSA, which keeps all money as pre-tax.
Not looking for a financial benefit, just want some control over where my money is. If I have to pay a management fee it's probably not worth it though.
posted by bleep at 3:00 PM on July 22, 2016
A better solution would be to periodically transfer your money from your employer's HSA to your chosen HSA, which keeps all money as pre-tax.
Not looking for a financial benefit, just want some control over where my money is. If I have to pay a management fee it's probably not worth it though.
posted by bleep at 3:00 PM on July 22, 2016
I am about to pool all my old HSAs into my current employer HSA if they will let me. So there's that as an option, theoretically. Is that a thing?
posted by Medieval Maven at 3:06 PM on July 22, 2016
posted by Medieval Maven at 3:06 PM on July 22, 2016
Best answer: This is legal and fairly straightforward.
Many credit unions provide HSAs with no management fees. If you're actively using the HSA as a source of medical payments, I'd set up an HSA at a local credit union and transfer the balances from all your other HSAs into that one. The money your employer deposits will continue to go into the HSA that the employer has an agreement with, and you'll have to set up transfers to your new, self-managed, HSA every so often (or you can do a rollover once a year - see the link above for the difference between a transfer and a rollover).
Go to a local CU and ask them to walk you through the whole thing. These need to be set up in person because: terrorism, so you may as well bring in all your paperwork from the other HSAs and do it all at once.
posted by Capri at 9:52 AM on July 23, 2016 [1 favorite]
Many credit unions provide HSAs with no management fees. If you're actively using the HSA as a source of medical payments, I'd set up an HSA at a local credit union and transfer the balances from all your other HSAs into that one. The money your employer deposits will continue to go into the HSA that the employer has an agreement with, and you'll have to set up transfers to your new, self-managed, HSA every so often (or you can do a rollover once a year - see the link above for the difference between a transfer and a rollover).
Go to a local CU and ask them to walk you through the whole thing. These need to be set up in person because: terrorism, so you may as well bring in all your paperwork from the other HSAs and do it all at once.
posted by Capri at 9:52 AM on July 23, 2016 [1 favorite]
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I had to keep my old employer HSA in order to get the employer contribution, so I just submit a transfer form a few times a year to empty it out.
posted by Karaage at 2:52 PM on July 22, 2016 [2 favorites]