How to Choose a Health Savings Account (HSA) Provider

A Health Savings Account (HSA) is an account specifically opened and funded by an individual to pay for medical expenses. This tax-advantaged account is used hand in hand with a High Deductible Health Plan (HDHP). Together, the HSA and HDHP offer a cost-effective means for meeting rising health-care costs. Read on to learn how to choose a HSA provider that best suits your financial situation and health care goals.

Instructions

Difficulty: Moderately Easy

1. Do your homework. Shop different HSA providers to find out and compare the fees offered. The most common fees charged by different HSAs include monthly maintenance fees, transaction fees and set-up fees. There may also be charges for access checks, ATM withdrawals, monthly statements and online bill pay. Any earnings or savings you may gain from a given provider may be lost as the fees add up.
2. Compare features, benefits and levels of service. Find out what features and services are offered by each HSA you consider. Some essential ones include: Debits cards or checks, online account access and monthly statements. Two comparable HSAs may offer the same services, but one may charge fees for the additional features and benefits they offer.
3. Evaluate the investment options provided by the different HSAs. These will usually range from a fixed interest on your deposits to brokerage account services that offer the opportunity to invest in mutual funds, bonds, bank CDs and the stock market. As you consider the investment options that may help you maximize earnings on your HSA deposits, keep in mind that not all of them are FDIC insured.
4. Weigh the advantages and drawbacks of choosing to have your HSA with a provider affiliated with your health insurer. This option may offer lower fees and the convenience of a single monthly payment that covers both your HSA deposit and premium payment. On the other hand, an independent HSA provider typically offers a wider range of investment options and higher interest rates. Secondly, if you change insurance providers, its affiliate HSA provider will often raise your fees or lower your interest.

Tips & Warnings

• Many HDIP insurance providers will partner with an HSA provider. However, this does not oblige you to use that provider. You can have your HSA with any licensed HSA, whether or not they are affiliated with your insurance provider.
• Always read the fine print to know and understand the terms, features and benefits of an HAS provider before you choose to go with them.