Some of you probably read my article on Health Savings Account previously. Unfortunately that plan didn’t ultimately go through for a couple reasons.
When I was at US Bank, because of how relatively new HSAs are, not even the on-site manager quite knew what to do. They told me they’d get back to me once the other manager comes in on Monday.
I also found out I would be covered by my work health insurance shortly and that complicated things on how much I would be able to contribute. Because I was covered for 9 months of the year under an HDHP plan, I would only be able to contribute a that portion of the annual limit of $3,050. 9 months doesn’t quite get me to $2,500 which was the minimum balance to have my monthly fee waived at US Bank.
US Bank also didn’t have investment HSAs, which meant I’d only be earning a measly fraction of a percent interest rate. I’ve looked at a couple of investment HSAs and most charge a substantial fee for for the ability to trade stocks.
I finally got around to searching for more HSA providers. I was hoping Fidelity would have HSAs wince all my investment accounts are already at Fidelity. Fidelity does have HSAs, but they’re only for businesses. I found this rather useful site: Administrators Offering Health Savings Accounts (HSAs) which allows you to search for regional and national banks which provide HSAs.
After going through the list of Washington HSA administrators, most which were very poor at describing their HSA, I ended up on Saturna Capital. Their brochure and website was quite useful in explaining how HSAs worked at their bank.
They have a no-fee HSA account if you invest in any of their 9 mutual funds. No setup fee, no transfer fee, no monthly/annual fee. You also have the option of investing in any stock of your choice, where trades are at ~$15 each. Much more info is provided in their brochure.
So I’ve had a couple emails back and forth with Matt, one of their customer support reps, inquiring on certain aspects of my situation. Here’s what I found out.
- You don’t actually need an HDHP to open an HSA account, only to contribute to it. Transferring from another HSA is fine.
- The contribution limit is pro-rated on a monthly basis. Because I was under a HDHP for 9 months, I get to contribute up to 75% of $3,050 = $2287.50. I have till the tax filing deadline in April 2012 to make this contribution. Subtract the initial contribution Microsoft gave me of $1,500, I can still contribute $787.50.
- There are 2 ways to transfer an HSA from one bank to another. 1. Obtain a Trustee to Trustee Transfer Form from the new bank and provide it to your current bank. 2. First open an account with your new bank and provide the new account information to the current bank as part of the exit paperwork. One thing US Bank kept insisting was the latter option, when I kept trying to tell me that UMB required a Trustee to Trustee Transfer Form, which they weren’t able to provide me.
- You can find more info on their 9 mutual funds here.
- Unfortunately, I was not allowed to scan or even fax the documentation in because they needed my original paperwork.
I’ve already submitted my paperwork. Hope things go through smoothly.