Do I have to use the bank my employer picked for my HSA?
Many people open an HSA through their employer or health plan when they sign up for an HSA qualified plan. This usually makes a lot of sense, especially if your employer arranges for payroll deposits to be directed pre-tax through payroll or, better yet, the employer makes a deposit on your behalf.
Even though is may make sense to start with your employers choice, the money is yours and you may decide to move it elsewhere anytime you want. Sometimes this makes sense if your bank charges high fees or does not offer any investment options. Usually this occurs when you leave your employer and they are no longer paying the fees.
How do I find a better HSA?
There are an estimated 3000 banks, credit unions, investment firms and specialty vendors offering HSAs today. Many people simply choose the institution that they do all their other banking or investing with, but that may not be the best choice. I recommend searching for HSA options through a site called HSASearch.com, which lists over 100 options and allows you to compare fees, features, investment offerings, as well as customer ratings of the services they provide.
How do I switch HSA Trustees once I find a better one?
You can make an unlimited number of trustee-to-trustee transfers from one HSA that you own to another HSA that you own. Under a trustee-to-trustee transfer (the method I strongly recommend for people moving money between HSA accounts), you request that the receiving HSA trustee work directly with the other HSA trustee to complete the transfer.
You never take possession of the money. Your custodian will generally have a form that outlines the information needed to complete the transfer. I recommend contacting the bank that you want to transfer from since they will often have stricter requirements than the bank receiving the money. Some trustees will charge a fee for this service.
You can own more than one HSA.
In fact, you can own as many as you wish. And when you are pursuing specific financial strategies, a second HSA might make sense. For most people, one HSA alone provides all the benefits that an HSA program offers without the burden and cost of managing multiple accounts.
Todd Berkley is an HSA industry veteran who runs AskMrHSA.com, and is the author of the HSA Owner’s Manual.