HSAs are designed somewhat like an IRA. I think of it as a Health Roth IRA. Accordingly, the ideal way to take advantage of this is to max out the HSA (up to your deductible) when you are young, and not use it. You want to pay out-of-pocket now, and leave the HSA money in some mutual funds to compound away until retirement.
In effect, you can put away tax-sheltered dollars that can be used to pay out-of-pocket medical expenses, such as your doctor co-pays or any other medical expenses not otherwise covered by your insurance. HSAs primarily help those who have high-deductible medical insurance policies. When the medical bills that aren't covered by your insurance come due, you remove funds from your HSA until your medical insurance finally kicks in. The great thing is that contributions to an HSA are tax deductible, and distributions taken to pay qualified medical bills aren't taxed to you either.
Under Internal Revenue Service Revenue rules for 2013, the maximum HSA contribution that can be made next year is $3,250 for employee-only coverage and $6,450 for family coverage—the same as this year.
In addition, the minimum deductible your health insurance must have is $1,250 for single coverage and $2,500 for family coverage.
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Jan. 18, 2014 @ 9:37p by kaiotes
posted: Nov. 14, 2005 @ 1:20p
Most Recent Posts
My understanding is like what you have researched on about earlier -- that that other family member needs to have a "lim... (more)
gaffer (May. 15, 2015 @ 2:25p)
Considering that the IRS is tracking the health insurance exchange premium subsidies to taxpayers and tracking who is en... (more)
fedguy (May. 15, 2015 @ 5:54p)
The problem isn't using HSA funds for a spouse. You can always do that for your spouse and any dependents. However, thos... (more)
btuttle (May. 17, 2015 @ 9:11a)
New Annual Contribution Levels for HSAs: * For 2013, the maximum HSA contribution that can be made is $3,250 for employee-only coverage and $6,450 for family coverage.
* Individuals who are eligible individuals on the first day of the last month of the taxable year (December for most taxpayers) are allowed the full annual contribution (plus catch up contribution, if 55 or older by year end), regardless of the number of months the individual was an eligible individual in the year. However, if you cease to be eligible in the following year, the excess over the pro rated contribution is included in income and subject to a 10 additional tax. * For individuals who are no longer eligible individuals on December 1st, both the HSA contribution and catch up contribution apply pro rata based on the number of months of the year a taxpayer is an eligible individual.
Out-of-Pocket Spending on HSA-Compatible HDHPs: * For 2010 & 2011, the maximum annual out-of-pocket amounts for HDHP self-coverage increase to $5,950 and the maximum annual out-of-pocket amount for HDHP family coverage is twice that, $11,900. 2012 maximums are $6,050 and $12,000
Minimum Deductible Amounts for HSA-Compatible HDHPs: * For 2010, 2011 & 2012, the minimum deductible for HDHPs increases to $1,200 for self-only coverage and $2,400 for family coverage.
HSA contributions and/or earnings are taxed in the states of: Alabama, California, New Jersey, New Hampshire, Tennessee, Wisconsin (beginning in 2012, Wisconsin contributions will no longer be taxed). HSA withdraws are tax deductible in California.
Employee contributions to a HSA are subject to FICA taxes, employer contributions to an individual's HSA account are not subject to FICA taxes. The self-employed must pay self-employment tax on their contributions, in tax years 2009 and 2011, but not in 2010.
HSA RESOURCES ********************************************************************************************* www.hsarates.com Site features a long list of HSA custodians along with their rates, fees, and terms.
HSA PROVIDER LIST *********************************************************************************************
OnlineSignupAPY Eff. Bank/CU/Other Min ChecksDebit CardBankingMo FeeFeeNotes
0.70% 8/01/13 Alliant CU $0 25 free Y Y N N If<$100,0% APY. Join the PTA (local or national) to qualify for membership.
1.01% 09/21/11 Bank of America $0 25 free ? ? $4.50 $20.00
1.00% 09/01/11 Cattle National B&T $0 50 free Y ? Y ? $3/month fee for account balance under $500. $20 fee to transfer in or out to another HSA.
1.00% 01/01/13 Adirondack Trust Company $0 Y Y Y $4.00 $25 was 3.00% till 1-1-13. $25 enrollment fee, $4.00 monthly management fee(Can be cut to $2.00 with eStatements).
0.75% 09/21/11 Patelco CU $10 Y Y Y $1.00 N $1/month fee waived 1st yr.
0.40% 09/21/11 Chase ? ? ? ? $2.50 ? $2.50/month additional for mutual fund investments. Fees may be waived based upon employer agreements.
0.20% 09/06/12 Stanford Federal CU $0 Y Y Y N $5 $15 Anyone can join w/$15 tax deductible donation to Friends of the Palo Alto Library
Tier 09/01/11 National 1st CU $0 ? ? ? ? ? <$6.25k 4.00%, >$6.15k 0.60%
Tier 03/01/13 HSA Bank $0 50($7.95) Y($3.00) Y $2.25 $18.00 >$25K 0.85%, $$25K-$15k 0.65%, $15K-$10K 0.45%, $10K-$5K 0.30%, $5K-$2.5K 0.15%, $2.5K-$0 0.10%
Tier 09/21/11 State Farm HSA ? ? ? ? $2.08 ? <$2.5K 0.20%, $2.5K-$10K 0.45%, >$10K 0.70%
Alliant Credit Union
Pays 0.70% APY (updated 8/8/13) on balances above $100,
25 free checks, debit card, no fees. Join the PTA (local or national) to qualify for membership.
$5.95/month to invest anything over $1000 into Mutual Funds
Tiered (03/07/09): $0.01-$999.99 0.30% $1,000.00-$4,999.99 0.50% $5,000.00-$9,999.99 0.80% $10,000.00 1.30%
No setup or monthly fees,
$50 to Open
$1 - $999 1.01% $1,000-$4,999 1.51% $5,000-$9,999 2.02% $10,000-$14,999 2.53% $15,000 3.05%
No minimum balance requirement No set-up fee No transaction fees Monthly maintenance fee of $3
Mutual Fund Investment Sweep option available for balances over $3,000 with a minimum transfer of $500**
Tiered APY: $0-$499 0.25% $500-$999 0.50% $1,000-$2,999 0.75% $3,000-$4,999 1.01%
$5,000-$9,999 1.26% $10,000-$14,999 1.51% $15,000 and over 2.02% Rates effective 03/08/2009.
Monthly fee $3.00. (waived when an account > $3,000 or with any direct deposit)
Free VISA Check Card and Free first order of checks
Bank of America :
1.50% APY. Effective Date 1/1/09 $4.50 monthly fee.
Cattle National Bank and Trust : 2.25% APY (03/08/09)
$20 signup fee, no monthly fee, free debit card, 50 free checks, online bill pay. $
3/month fee for account balance under $500. $20 fee to transfer in or out to another HSA.
Chase APY is 0.19% (as of 05/20/09)
Monthly fee $2.50 for account, $2.50/month additional for mutual fund investments
CitibankCoastal FCU 1.50% APY (as of 12/01/12)
free membership, no fees, must keep $5 in regular savings account
visa check card available, can see account balance online
signup can now be done online, but the online banking is still weak, so
RECOMMENDED BE LOCAL TO A BRANCH (North Carolina)
https://www.connexuscu.org/webfederal.asp?Cabinet=Main&Drawer=Main&Folder=Investments&SubFolder=HSA: $100 min, rates as high as 4.00% APY
No fees, free checks, free debit card. Accounts and membership must be setup by fax (not an online process)
Eligible to join through $5 donation to Connexus Association (scholarship fund; call or IM to get this form).
Delta Trust & Bank :
Tiered APY: <$3,000 0.35%, $3,001-$9,999 0.65%, $10,000 1.31% (as of 04/18/12)
no signup fee, no monthly fee, free debit card, 150 checks $10.60. Online account access.
Farmers State Bank
Tiered, $ 1,000-$ 4,999 1.60% $ 5,000-$ 9,999 2.60% $10,000-$14,999 2.90% $15,000 4.09%
Bank Monthly Maintenance $3.00
First Federal Savings Bank of Wisconsin :
MUST OPEN ACCOUNT IN PERSON IN Waukesha, WI,
Tiered interest rate based on the balance (Effective 09/01/11)
Daily Balance $25,000 and greater - .090% APY
Daily Balance $10,000 - $24,999 - .65% APY
Daily Balance $2,500 - $9,999 - 0.40% APY
Daily Balance less than $2,500 - 0.25% APY
no signup fee, $1/month fee, 50 checks/$10, debit card $5 with usage fees outside of WI
Update April 2012.
Now has $2.50 a month fee. $25 closing fee.
'http://www.firsthorizonmsaver.com/index.php Rates as of March 8, 2009
$0 - $499.99 0.25%
$500 - $3,499.99 0.50%
$3,500 - $4,999.99 1.00%
$5,000 - $9,999.99 1.60%
No monthly maintenance fee
$100 minimum to open.
$3.00 per month, waived for the first six statement cycles, and waived if collected balance is $300.00 or more
Tiers: (as of 06/01/12)
Less than $2,500 0.25%
Greater than $10,000 0.75%
Great option for investments: you can join an hsabank account to a TD Ameritrade brokerage, allowing for fee-free ETF trading.
Tiered APY: (Effective as of 07/01/13)
$25,000 or more 0.65%
$15,000 - $24,999.99 0.55%
$10,000 - $14,999.99 0.40%
$5,000 - $9,999.99 0.30%
$2,500 - $4,999.99 0.15%
Less than $2,500 0.10%
$18 signup fee, $2.25 monthly fee (waived with $5000 or greater balance in deposit account), 50 checks $7.95, debit card $3.00
National 1st CU
Eligible if you live, work, worship or attend school in Santa Clara County, CA and in the community surrounding our Arlington, Texas branch.
$0 - $6,150 4.00%
> $6,250 0.60%
OptumHealth Bank HSA (was Exante)
fees vary by exact product, $1.50 to $6 monthly, balance to avoid fees anywhere from $1500 to $5000
must savings with another $10 to avoid other fees, $1/month fee waived first year, free checks, free debit card.
(as of 2008-12-3: open to public, fee waved automatically, savings account automatically opened and funded with $1 (their dollar, not yours) and they claim no other fees for first year)
Provident Credit Union : 1.25% APY (as of 08/18/13)
$25 minimum, (fees?), debit card & checks.
Must apply for CU membership (1200 eligible associations, including Sierra Club); print & mail application forms (existing members can apply online).
Brokerage based, no monthly or annual fee
No fees if you invest in their mutual funds
Commissions for self-directed trading ~ $14.95 per trade
Inactive fee after 1 year ($12.50 or $25 for mutual fund/brokerage account)
Stanford Federal Credit Union 0.20% APY (as of 09/06/12)
No Minimum Balance Requirement, No Monthly Fee, Debit Card Access, Online Access, Free Online Bill Payment Services, Free eStatements
Anyone can join with $15 tax deductible donation to Friends of the Palo Alto Library
They have a one time $10 fee for the HSA. One time $5 fee for joining the CU. $50 must be kept in a savings account at all times to stay a member.
State Farm HSA
$0 - $2,499 0.15% 0.15%
$2,500 - $9,999 0.35% 0.35%
$10,000+ 0.60% 0.60%
(effective 05/30/12) Annual fee of $25
$0 to $999.99 0.05%
$1,000 to $2,499.99 0.15%
$2,500 to $14,999.99 0.25%
$15,000 + 2.25%
(as of 12/01/10, rate varies by zip code)
no signup fee, $20 annual fee, 25 checks $7.95, free debit card
Tiered: $0-$1,000 0.75%, $1,000.01-$2,000 1.60%, $2,000.01 2.00% (rates as of 6/1/08)
Monthly maintenance fee $4.25
Mutual funds which will act as HSA custodians for direct investors: Geier Funds Toreador Funds Huntington Funds Mirzam Funds IMS Capital Appleseed Fund The Bruce Fund Sparrow Capital Roosevelt Multi-Cap Fund
Lots of HSA accounts are available for individuals, check out eHealthIsurance.com. You have to go through the underwriting process though, which can be a pain. Many times you get to choose your HSA administrator, which is I guess what US Bank is trying to do, entice you to choose them.
Doesn't seem like they allow investment in mutual funds though, which would really take advantage of the tax benefits of HSAs.
juniorjam said: That's interesting. I've never seen a HSA offered through anybody except an employer.
Unless you work for a bank or investment firm, I don't think you've ever seen an HSA offered through an employer. The employer offers the HDHP, not the HSA. The HSA is owned and controlled by the employee.
Are you thinking of a flexible spending account? If so, that is not the same thing.
fotomaniak said: they say "we pay competitive rates on your HSA account". But their rate for MMA is only 0.4%, so I wonder what they mean by competitive
You can view the rates for your zip by clicking on your desired option Mine: Minimum Opening Balance $0.00 Set Up Fee $15.00 Monthly Maintenance Fee $3.50 Requirement to Waive Monthly Maintenance Fee $1,500 minimum daily ledger balance Interest Tiers Tier Interest Rate APY $0 - $999 2.96% 3.00% $1,000 - $1,999 2.96% 3.00% $2,000 - $4,999 2.96% 3.00% $5,000 - $9,999 3.20% 3.25% $10,000 - $24,999 3.44% 3.50% $25,000 - $49,999 3.68% 3.75% $50,000 and Above 3.92% 4.00%
Check Writing Unlimited Check Order $7.95 for 25 checks Check Return Free check safekeeping1 U.S. Bank Check Card Free2 Other Free Internet Banking Free Online Statements Designate a Power of Attorney3
SuperMxyz said: This is a pretty good deal for now, but better options will come along soon (a few years hopefully.) I'm holding out until HSA's let you invest in good mutual funds.
Health Savings Administrators permits investments in Vanguard mutual funds (http://www.hsaadministrators.com/). They impose the following fees:
Account setup fee $ 20.00 Annual administrative fee-single account $ 35.00 Annual administrative fee-family account $ 60.00 Administrative fees are payable direct in advance. Mutial Fund customers (no debit card) - Custodial fee .00125 per quarter, deducted from account balance Resource Bank Debit Card Customers (not mutual funds) There are no deposit fees, no per check fees and no fee to close the account.
Rates (APR/APY) $15,000 or more: 4.12% 4.20% greater than $4,999.99 and less than $15,000: 3.00% 3.05% greater than $2,499.99 and less than $5,000: 1.98% 2.00% greater than $499.99 and less than $2,500.00: 1.63% 1.65% less than $500.00: 0% 0%
Fees Monthly Bank Account Fee (Waived on balances of $3,000 or more) $2.25 Monthly Brokerage Account Fee (Balances greater than $500) $1.25 Monthly Brokerage Account Fee (Balances less than $500) $2.00
HSA Bank provides you with an alternative investment option that offers a wide range of stocks, bonds and over 9,500 mutual funds, including a supermarket of over 850 popular no-load, NTF (non-transaction fee) funds. Self-directed Brokerage, Brokerage Partner: Harrisdirect™ Fee structure: $20 annually + trading fees Standard banking fees apply Investment Options: Over 8,000 stocks, Bonds, over 9,500 mutual funds, including nearly 850 no-load, NTF funds.
thejerseydevil said: goldsheet said: hsabank.com has a decent HSA Yeah, that's who I've used for the past year. So far, so good.
Good to hear, I am thinking of switching to them, which is why I had info to post. I started out with an MSA at USAA, but they decided not to offer HSAs so I transferred to State Farm Bank. Their rates have stayed at 2.5%, so 4.20%APY sounds great
rrosoff said: Health Savings Administrators permits investments in Vanguard mutual funds (http://www.hsaadministrators.com/). They impose the following fees: Account setup fee $ 20.00 Annual administrative fee-single account $ 35.00 Annual administrative fee-family account $ 60.00
why wait to setup an account until there are lower fees? for me I'm setting it up as a savings account earning 3-4% now, then when brokerage accounts go down I'll move it over. Paying $35 per account on a small balance is cost prohibitive right now until the balance is higher
I think we should make a guidelnie post about Health Savings Accounts. These type of accounts really do have the potential to address some problems with the current way we manage our health care today. I in particular have a question - can we invest in stocks with the HSA account, or just specific mutual funds narrowed down to a few different issuers?
Since this is such a new law, there are also few guidelines about how HSA funds can be invested. HSA accounts weren't intended to be invested to play market swings. They were intended to help you cover health-care costs not covered by your health insurance plan. So make sure that your funds are invested safely and, to a degree, conservatively.
patelco's 5.12% APY is undoubtedly the best in the nation. but they don't offer HSAs until 1/3/06. good news here is that 4/15/06 is the deadline for a 2005 coded transaction... I am thinking of writing and mailing a check 12/31/05 which wouldn't post until 1/3/06. that way I could use pretax $$ to fund the 2005 portion and wouldn't have to bother setting up an account somewhere else and a 2nd account (or move it to patelco if a 2nd account isn't allowed) in early '06
hmm. patelco membership is going to be required though....
km said: I carry a individual BCBS policy with a high deductible ($2500.00).
Can I set up a HSA?
well, it only really makes sense if you are earning an income (a question I raise becuase you say you carry an individual policy) and you can only make pre-tax income contributions up to the amount of your deductible of your HSA compatible Health care policy.
do some research on your plan to see if it qualifies. HSA is a big selling point so they will proclaim it loudly if it is! and good luck, I am joining an HSA compatible Jan 1, 2006
No. The plan I carry is not compatible. The compatible plans had features I did not care for. My BCBS plan is very comprehensive and has few exclusions. That's the way I wanted it. And you are correct, I am not working, but I do plan to work in 2006.
It seems everytime you turn around they're tweeking the laws so I thought I'd take a shot and ask anyway.
Kind of like how some people have 401k's AND somehow manage to fund IRA's as well. Looking for possible loopholes.
km said: Kind of like how some people have 401k's AND somehow manage to fund IRA's as well. Looking for possible loopholes.Everyone can have both a 401k and can also fund their IRA. Tax-deductability of the IRA will vary with income as well as other factors.
Anyone had a good experience opening a HSA with US Bank?
Mine has been less than stellar.
Early Nov: Opened HSA account online. Faxed in required docs. Late Nov: Reived no correspondence from US Bank. Called in 800 US Bank CS number and told account was never opened and that I should resubmit my application. Resubmitted application online but denied by Chexsystems. Called in the US Bank and told that there was 'an issue' and that I should re-fax in my docs from my original early Nov application.
01 Dec: Called US Bank again and told that there continued to be 'an issue' and that I would receive a letter from US Bank in approx 1 week with details and that I would need to go to a local office to resolve 'the issue.'
22 Dec: No letter received yet.
I have given up on US Bank and will instead open a HSA with Patelco.
I am currently covered by my wife's health insurance. I wonder if I should ask her to take me off her plan until next open enrollment period, so that I can qualify for this HSA and keep it free for life. Probably it's not worth it though...
I did not see any investment options on the US Bank website. It is definitely not worth it if all I can do is keep my tiny balance on a 3% APY savings account with deferred tax.
It is also my understanding that you cannot count medical expenses reimbursed from HSA as itemized deductions. Am I correct?
Can I claim both the “above-the-line” deduction for an HSA and the itemized deduction for medical expenses? You may be able to claim the medical expense deduction even if you contribute to an HSA. However, you cannot include any contribution to the HSA or any distribution from the HSA, including distributions taken for non-medical expenses, in the calculation for claiming the itemized deduction for medical expenses.
That's an OFFICIALresponse from the IRS. The question is what does it mean?
As I read it, it says you don't include any distribution from the HSA in your calculations for itemizing medical expenses. It does NOT say that you can't deduct the expenses that you paid for with those distributions. It DOES say you ignore the distributions if you itemize your medical expenses. Right?
I just called First Federal of Wisconsin. Unfortunately, they require you to open the account in person (under the "Know Your Customer" rules of the Patriot Act). I asked if I could have my signature notarized locally, they said no.
It left me wondering how many terrorists are planning to open an HSA!!!
ciba said: Unless you work for a bank or investment firm, I don't think you've ever seen an HSA offered through an employer. The employer offers the HDHP, not the HSA. The HSA is owned and controlled by the employee.
Actually most HSA's are sponsored by an employer looking to save money on health costs. While the HSA is owned by the individual there is nothing to stop an employer from bringing in an HSA administrator to administrate the deductions through payroll deductions.
Itasca Bank doesn't look as good as First Federal, but for those who would like the info on a place that allows you to open a free HSA from out-of-state:
Itasca Bank & Trust Co. offers individuals or groups tiered rate interest-bearing Health Savings Accounts (HSAs) with no minimum balance requirements, no monthly service fees or annual administrative fees, no initial setup fee, a no annual fee debit card and free Internet access. http://www.itascabank.com/
<<patelco's 5.12% APY is undoubtedly the best in the nation. but they don't offer hsas until 1/3/06. good news here is that 4/15/06 is the deadline for a 2005 coded transaction... I am thinking of writing and mailing a check 12/31/05 which wouldn't post until 1/3/06. that way I could use pretax $$ to fund the 2005 portion and wouldn't have to bother setting up an account somewhere else and a 2nd account (or move it to patelco if a 2nd account isn't allowed) in early '06>>
HSA Bank raised rates on 2/28 $15,000 or more 4.41% 4.50% $4,999.99 and less than $15,000.00 3.15% 3.20% $2,499.99 and less than $5,000 2.13% 2.15% $500.00 and less than $2,500.00 1.73% 1.75% less than $500.00, 1.00% 1.00%
goldsheet said: HSA Bank raised rates on 2/28 $15,000 or more 4.41% 4.50% $4,999.99 and less than $15,000.00 3.15% 3.20% $2,499.99 and less than $5,000 2.13% 2.15% $500.00 and less than $2,500.00 1.73% 1.75% less than $500.00, 1.00% 1.00%
oh nice. I just pushed $550 into hsabank a couple days ago so that my balance would earn interest. Prior to this boost, no interest was paid on accounts with less than $500. Still, it is a painfully low APR. The more important place to get to is $3K (balances above 3000 have no monthly fee).
gaffer said: LurkerDan said: fedguy said: Other members in the family can have FSA coverage as long as they are not covered by the HDHP. Really? I've been researching this like mad over the past 24 hours, and most of what I have read says otherwise, that for the family it's pretty much either/or, unless she has a "limited" FSA or her FSA clearly spells out that it can't be used for anyone else in the family (which apparently most don't?).
But now that I think about it, if the "FSA for her/HSA for me and our daughter" combo can be ok in some circumstances, and those circumstances depend on the FSA documentation for her plan, how is the IRS going to know this absent an audit? Is it one of those "yeah, technically you can't do it but nobody will ever catch it" deals? My understanding is like what you have researched on about earlier -- that that other family member needs to have a "limited FSA" or has it clearly spelled out that it can't be used for anyone else. It wasn't enough that you won't use your HSA funds for that family member with an FSA. That's how my HR explained it to me as well (I am also in HSA for me/kid, FSA for her situation). Now whether the IRS can enforce this at all is another thing. The problem isn't using HSA funds for a spouse. You can always do that for your spouse and any dependents. However, those covered under an HDHP cannot have any other general first dollar coverage before the deductible is met. Like an HSA, FSA funds can be used for your spouse and dependents even if they are not covered by your health insurance plan. So the only way you can qualify for an HSA in such a situation is for the spouse to not enroll in a health care FSA.
And, yes the IRS can enforce this just as any other ineligibility for an HSA, with penalties and taxes. Now, whether they can detect this or not is another thing. However, just like the rest of the tax code, it is voluntary compliance. If you get audited for some other reason or win the lottery and get randomly selected, your HSA will be invalidated and all payroll taxes, income taxes, and penalties would apply.
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