HSA Rollover

[Anonymous]

DH and I have been rolling over our various HSA plans from one employer to the next for years and we’re thinking now about rolling over to an independent brokerage company and just leaving a lower amount in our employer’s HSABank. Is this common? Does anyone else have experience doing this? We’re thinking about an HSA with Fidelity.

[Anonymous]

My understanding is that HSA money has to stay in an HSA account. Most HSAs come with investment options (administered by 3rd party brokerages), and they are no different than regular brokerages.

If you are talking about withdrawing your HSA money and put it into an external brokerage that's not affiliated with an HSA - you may end up paying tax + penalties.

[Anonymous]

Anonymous wrote:DH and I have been rolling over our various HSA plans from one employer to the next for years and we’re thinking now about rolling over to an independent brokerage company and just leaving a lower amount in our employer’s HSABank. Is this common? Does anyone else have experience doing this? We’re thinking about an HSA with Fidelity.

I don't know if it's common, but it's what I do. I have an HSA account with Fidelity and an automatic payroll deduction that puts my contribution into the Fidelity HSA. The employer contribution has to go to the insurer's pet HSA (which pays a comical 0.01% interest), but every few months or so I fill out the paperwork to roll over that balance into my Fidelity account.

When moving money from one HSA administrator to another, I do a "trustee-to-trustee transfer," not a rollover. A rollover goes through you—one administrator sends you a check, which you then deposit with the other administrator. If you don't make the deposit within 60 days, you could be hit with penalties. A trustee-to-trustee transfer is sent straight from one HSA administrator to the other. Also, you can only do an HSA rollover once per year, but there's no limit on how often you can do trustee-to-trustee transfers.

[Anonymous]

I put my contribution in Fidelity and the employer one went into HSA bank. This year I changed to regular insurance so I will put the HSA money into my Fidelity HSA. I would keep the minimum in the employer account that you need to pay for the deductible.

[Anonymous]

Anonymous wrote:I put my contribution in Fidelity and the employer one went into HSA bank. This year I changed to regular insurance so I will put the HSA money into my Fidelity HSA. I would keep the minimum in the employer account that you need to pay for the deductible.

You're not allowed to contribute to an HSA if you don't have an HDHP. If you switched to non-HDHP insurance and are still making HSA contributions, you may have a nasty surprised when filing taxes next year.

[Anonymous]

Anonymous wrote:DH and I have been rolling over our various HSA plans from one employer to the next for years and we’re thinking now about rolling over to an independent brokerage company and just leaving a lower amount in our employer’s HSABank. Is this common? Does anyone else have experience doing this? We’re thinking about an HSA with Fidelity.

My HSA account is at Fidelity through which I invest. My employer's is through payflex. I let them deduct from payroll so I can get their seed money each year. At the end of the year, I transfer the entire balance to Fidelity and leave the account open..maybe with a couple of bucks in it.

[Anonymous]

I've thought about it, but as I get older (turn 50 this year) I value simplicity over saving small amounts of money. I keep my HSA at HealthEquity because that's where my employer plan is and, while the expenses are higher than I'd like, the investment options are decent and it means I only have one HSA and do not have to do periodic rollovers. There is only so much admin I can take given my job sucks me dry. Maybe I'd save $200 a year, but that no longer seems worth it. Everything I've seen says Fidelity HSA is the way to go if you want to take this route.