Health
Savings Account contributions are required
by Federal law to be held by a qualified trustee or
custodian. The funds can be deposited with any
authorized HSA administrator, regardless of which
insurance company underwrites the policy. Each
administrator offers different features, and has a
different fee schedule, summarized below.
Our
recommendation is to set up your HSA with one of the
many third party financial institutions offering to
administer your Health Savings Account. There
are two main reasons for this:
-
Insurance rates constantly change, and there is
a good chance that at some point you will find
it financially beneficial to switch to a different
plan with a different insurance company.
Some insurance company-sponsored administrators
do not pay interest to account holders who do
not also carry the accompanying health insurance,
or they may charge additional fees. You
don’t want to have to change your administrator
if you decide to change your health insurance.
- Independent
HSA administrators often provide lower fees and
more investment options than those offered by the
insurance company.
There
are many HSA administrators to choose from, all with different fee structures
and services. Listed below are several with whom we have a relationship.
After choosing the one that best meets your needs, you can apply online with
some companies, or download an application to mail in with your initial deposit.
Some
administrators only offer savings account options, while others offer CDs, mutual
funds, or complete brokerage services. Low fees are an important consideration
until you have built up some money in your account. Three of the plans
that have no fees include American Chartered Bank,
First American Bank, and
Fayetteville Bank.
For
an administrator with more investment options, the most popular among our clients
include HSA Bank and HSA
Resources. In addition to savings accounts, these two administrators
offer a full brokerage services with discount broker partners, allowing you
to purchase stocks, bonds, and mutual funds through Vanguard, Fidelity,
Janus, and other mutual fund companies.
You
may also want to consider HSA Resources
if you are looking to set up HSAs for an employer group. They have good
service, low rates, and two attorneys on staff to help handle difficult issues
that sometimes get complicated with group plans (section 125 issues, "comparability"
testing of HSA contributions, Sub S and partnership contributions, etc.).
HSA
for America is an independent health insurance broker specializing
in HSA-qualified plans for individuals and families. We are happy to provide
our health insurance customers assistance in choosing the best administrator
to meet their needs.
