[Sofia]

HSA Accounts… Hi it’s me again with another question, this time about HSA.
I love my HSA account and have had it with Schwab for a while now- fairly good /user friendly platform.

I set to contribute to it every paycheck to max it out. Well, I went to check it recently and noticed my latest contributionS didn’t make it.

I asked my employer and was told that my contribution went to HSABANK instead… HSABANK used to have a partnership with Schwab so that’s why my account is with them… but as of a few months ago (and I totally missed this

communication), they’re basically cutting ties with Schwab and every contribution has stayed with HSABANK… uninvested!!

On top of that, they have 3 options to invest contributions and the DIY non-managed one comes with a fee which to me is knowing I paid no fees with Schwab.

I also learned that they’re planning to liquidate my investments on Schwab sometime next month and move the cash balance over to HSABANK.

So… here’s what I’m thinking (and I want to know if you’d do anything differently).

1- I will ask Schwab to change my HSA brokerage account from custodial (since owned by HSABANK) to personal. That way they don’t move things over for me like they plan to.

2- I’ll move the surprise cash I have available to invest from HSABANK to Schwab

3- I’ll set up a direct deposit rule to move all future paycheck contributions from HSABANK to Schwab.

My reasons:
1- Not paying for fees
2- One HSA investment account
3- Platform I’m familiar with that’s more user friendly
Anything I should consider that I may be overlooking ?

Has anyone else been in this situation?

[Bill]

It sure sounds like you have the GEHA HDHP with HSA as I’m quite familiar with what you are describing, having dealt with the same nonsense with HSA Bank.

Your plan would likely work, but here’s what a lot of people did from comments I’ve seen:

Instead of keeping the existing Schwab HSBA account, move the $$ to a Fidelity HSA. As far as I know, Schwab does not have a standalone HSA available as a personal account.

I could be wrong, but I think that was just a special arrangement they had with HSA Bank and GEHA.

Depending on which investments you have in the Schwab account, you may need to liquidate them before doing the direct transfer to Fidelity.

All GEHA passthrough contributions will still go to HSA Bank but you can invest them on the HSA Bank platform, although the investments are handled by a third party company.

HSA Bank did cause a shitstorm when they originally rolled out their plan by having a fee associated BUT after pushback they changed that. So, if you use the HSA Invest (Choice Option), there is no separate fee.

One additional problem, if you wanted to move the HSA Bank funds once or twice a year to Fidelity to consolidate, that is also a shitshow.

For now, even if you invest in ETFs that are transferable in-kind, that is not possible and you’d have to liquidate to cash into your main HSA balance at HSA Bank and then do the transfer.

So yeah, HSA Bank ruined a perfectly good program that existed with the Schwab interface.

[Ben]

This is frustrating when this happens. Several years ago I had an employer that changed HSA admins 3 times in 4 years. I finally consolidated all my HSA holdings to Fidelity.

I usually transfer one a year (most places will charge on the transfer out) and call it good.

When I checked several years ago, Schwab did not offer standalone HSA accounts.

[Kristy]

Yep. The new arrangement is awful. Obviously, DriveWealth and LeafHouse Financial Advisors are the winners in this arrangement.

I am not selling positions in my Schwab invest account (and revised my positions for long term holds before the transition).

Unfortunately, new money goes to the new HSA invest option.

I have not heard anything about liquidating Schwab accounts.

I have looked into rolling the HSA funds to self directed account, but haven’t figured anything out.

[Jamie]

Check your terms with the new account. Many charge a monthly maintenance fee if the balance gets too low and I’m not sure how that would work if you went negative.

Also verify you can transfer anytime. I had an HSA once that restricted transfers to once a year.

[Author]

Posts