[Fidelity Health Savings Account Mega-Thread]

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anon_investor
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by anon_investor »

okwriter wrote: Wed Jun 16, 2021 2:17 pm
anon_investor wrote: Wed Jun 16, 2021 2:02 pm Is there a way to do an indirect rollover to the Fidelity HSA electronically, or does it still require a check be mailed to Fidelity?
No mailing of checks needed, see here - viewtopic.php?p=5975527#p5975527
Cool, thanks! Did you do a transfer electronically first, then call them, or call them and have them process the transaction over the phone?
okwriter
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by okwriter »

anon_investor wrote: Wed Jun 16, 2021 2:21 pm
okwriter wrote: Wed Jun 16, 2021 2:17 pm
anon_investor wrote: Wed Jun 16, 2021 2:02 pm Is there a way to do an indirect rollover to the Fidelity HSA electronically, or does it still require a check be mailed to Fidelity?
No mailing of checks needed, see here - viewtopic.php?p=5975527#p5975527
Cool, thanks! Did you do a transfer electronically first, then call them, or call them and have them process the transaction over the phone?
I did it all over the phone.
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anon_investor
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by anon_investor »

okwriter wrote: Wed Jun 16, 2021 2:28 pm
anon_investor wrote: Wed Jun 16, 2021 2:21 pm
okwriter wrote: Wed Jun 16, 2021 2:17 pm
anon_investor wrote: Wed Jun 16, 2021 2:02 pm Is there a way to do an indirect rollover to the Fidelity HSA electronically, or does it still require a check be mailed to Fidelity?
No mailing of checks needed, see here - viewtopic.php?p=5975527#p5975527
Cool, thanks! Did you do a transfer electronically first, then call them, or call them and have them process the transaction over the phone?
I did it all over the phone.
Good to know, thanks!
isubrama
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by isubrama »

anon_investor wrote: Wed Jun 16, 2021 2:40 pm
okwriter wrote: Wed Jun 16, 2021 2:28 pm
anon_investor wrote: Wed Jun 16, 2021 2:21 pm
okwriter wrote: Wed Jun 16, 2021 2:17 pm
anon_investor wrote: Wed Jun 16, 2021 2:02 pm Is there a way to do an indirect rollover to the Fidelity HSA electronically, or does it still require a check be mailed to Fidelity?
No mailing of checks needed, see here - viewtopic.php?p=5975527#p5975527
Cool, thanks! Did you do a transfer electronically first, then call them, or call them and have them process the transaction over the phone?
I did it all over the phone.
Good to know, thanks!
It can be done online, http://personal.fidelity.com/misc/buffers/toa.shtml
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anon_investor
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by anon_investor »

isubrama wrote: Wed Jun 16, 2021 7:11 pm
anon_investor wrote: Wed Jun 16, 2021 2:40 pm
okwriter wrote: Wed Jun 16, 2021 2:28 pm
anon_investor wrote: Wed Jun 16, 2021 2:21 pm
okwriter wrote: Wed Jun 16, 2021 2:17 pm

No mailing of checks needed, see here - viewtopic.php?p=5975527#p5975527
Cool, thanks! Did you do a transfer electronically first, then call them, or call them and have them process the transaction over the phone?
I did it all over the phone.
Good to know, thanks!
It can be done online, http://personal.fidelity.com/misc/buffers/toa.shtml
I am not sure that purely online process covers indirect HSA rollovers.
okwriter
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by okwriter »

isubrama wrote: Wed Jun 16, 2021 7:11 pm It can be done online, http://personal.fidelity.com/misc/buffers/toa.shtml
This only covers direct transfers. For indirect ones, you need to either call them (easier) or mail them a check.
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anon_investor
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by anon_investor »

okwriter wrote: Wed Jun 16, 2021 10:06 pm
isubrama wrote: Wed Jun 16, 2021 7:11 pm It can be done online, http://personal.fidelity.com/misc/buffers/toa.shtml
This only covers direct transfers. For indirect ones, you need to either call them (easier) or mail them a check.
How long after the call did it take for the funds to show up in your Fidelity HSA? I am thinking of doing this, having the funds out of the market for 2 plus weeks for a direct trustee to trustee transfer just feels too long for me.
okwriter
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by okwriter »

anon_investor wrote: Wed Jun 16, 2021 10:57 pm
okwriter wrote: Wed Jun 16, 2021 10:06 pm
isubrama wrote: Wed Jun 16, 2021 7:11 pm It can be done online, http://personal.fidelity.com/misc/buffers/toa.shtml
This only covers direct transfers. For indirect ones, you need to either call them (easier) or mail them a check.
How long after the call did it take for the funds to show up in your Fidelity HSA? I am thinking of doing this, having the funds out of the market for 2 plus weeks for a direct trustee to trustee transfer just feels too long for me.
Immediately! The Fidelity rep was very nice; he even asked me to verify that the HSA balance looked correct before ending the call.

I don't think you'll have long time-out-of-market issues. If anything, perhaps you should wait a day or two before you make the call (just to be sure that your old HSA provider has finished sending the money to you). Fidelity is so efficient that if you call them too soon, they might end up doing the second half of the rollover before your old HSA completes the first half.

Indirect rollovers do have a 1 per year restriction though, so you might want to take that into account. The reason I did it was to avoid fees. My old HSA provider charged a $20 fee for direct transfers, but indirect ones were free.
cas
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by cas »

anon_investor wrote: Wed Jun 16, 2021 10:57 pm I am thinking of doing this, having the funds out of the market for 2 plus weeks for a direct trustee to trustee transfer just feels too long for me.
Be aware that a 60-day (indirect) rollover requires tax due diligence. The old HSA trustee has to send you a correct 1099-SA. Fidelity has to send you a Form 5498-SA correctly showing that the correct $ amount was a "Rollover Contribution" (Box 4) and not a regular contribution (Box 1). (To do this they have to be told that you intend a 60-day rollover contribution when they get the money, so that they can code the Form 5498-SA correctly.) You need to fill out Form 8889 correctly, showing the rollover amount, and include it with your tax return. All of these forms have to match up, or the IRS may contact you about 2 years later telling you that you have an excess contribution in your HSA, that you owe penalties, and will continue to accrue penalties until you remove it ... and that it is your burden to prove to them that it isn't an excess contribution.

There is also the requirement that there can't have been another HSA 60-day rollover within the last 365 days. (Or, again, you'll have an excess contribution accruing penalties until you remove it.)

Trustee-to-trustee transfers have no such tax reporting requirements or forms.

In other words, it is easier to shoot yourself in the foot with a 60-day rollover. So do your due diligence, keep an eagle eye on every transaction at the time it happens to make sure it looks coded correctly as the right thing, keep appropriate documentation/screenshots and stick it in your tax folder, put a note in your tax folder to remind yourself that your Form 8889 needs to report the rollover, etc.
sycamore
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by sycamore »

anon_investor wrote: Wed Jun 16, 2021 10:57 pm I am thinking of doing this, having the funds out of the market for 2 plus weeks for a direct trustee to trustee transfer just feels too long for me.
To avoid being out of the market, just swap some bonds for stocks in another tax-deferred account (an IRA, maybe?) when you initiate the rollover, then swap back when the HSA rollover is complete.
cas wrote: Thu Jun 17, 2021 6:00 am Be aware that a 60-day (indirect) rollover requires tax due diligence. The old HSA trustee has to send you a correct 1099-SA. Fidelity has to send you a Form 5498-SA correctly showing that the correct $ amount was a "Rollover Contribution" (Box 4) and not a regular contribution (Box 1). (To do this they have to be told that you intend a 60-day rollover contribution when they get the money, so that they can code the Form 5498-SA correctly.) You need to fill out Form 8889 correctly, showing the rollover amount, and include it with your tax return. All of these forms have to match up, or the IRS may contact you about 2 years later telling you that you have an excess contribution in your HSA, that you owe penalties, and will continue to accrue penalties until you remove it ... and that it is your burden to prove to them that it isn't an excess contribution.

There is also the requirement that there can't have been another HSA 60-day rollover within the last 365 days. (Or, again, you'll have an excess contribution accruing penalties until you remove it.)

Trustee-to-trustee transfers have no such tax reporting requirements or forms.

In other words, it is easier to shoot yourself in the foot with a 60-day rollover. So do your due diligence, keep an eagle eye on every transaction at the time it happens to make sure it looks coded correctly as the right thing, keep appropriate documentation/screenshots and stick it in your tax folder, put a note in your tax folder to remind yourself that your Form 8889 needs to report the rollover, etc.
When I transferred my HSA to Fidelity I used the direct rollover just because it was easier and seemed more foolproof / less likely for a check to get lost in the mail; wasn't even thinking about the tax due diligence aspect. Good to know.
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anon_investor
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by anon_investor »

sycamore wrote: Thu Jun 17, 2021 7:22 am
anon_investor wrote: Wed Jun 16, 2021 10:57 pm I am thinking of doing this, having the funds out of the market for 2 plus weeks for a direct trustee to trustee transfer just feels too long for me.
To avoid being out of the market, just swap some bonds for stocks in another tax-deferred account (an IRA, maybe?) when you initiate the rollover, then swap back when the HSA rollover is complete.
Unfortunately that won't work since I have 0 fixed income aside from I Bonds.
Barefootgirl
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by Barefootgirl »

So, I called HSA Bank to move the entire remaining balance to TDA. The HSABank rep told me I cannot do that because I need to maintain a $1K minimum balance at HSABank at all times...but I told her I was closing out both accounts and moving them to Fidelity. She said I can't move the balance. I have to close out HSA Bank with the $1K balance I have left it...so it looks like BOTH accounts will transfer to Fidelity.

One with cash in it and one with ETFs and a mutual fund in it.

:oops:
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czaj
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by czaj »

Barefootgirl wrote: Sat Jun 19, 2021 9:20 am So, I called HSA Bank to move the entire remaining balance to TDA. The HSABank rep told me I cannot do that because I need to maintain a $1K minimum balance at HSABank at all times...but I told her I was closing out both accounts and moving them to Fidelity. She said I can't move the balance. I have to close out HSA Bank with the $1K balance I have left it...so it looks like BOTH accounts will transfer to Fidelity.

One with cash in it and one with ETFs and a mutual fund in it.

:oops:
Have you tried transferring it to TD yourself? I found that my account says it has a minimum, but I’m still able to transfer.

Another option is to just withdraw the amount in HSA Bank if you have enough in eligible expenses. Then you can at least save on the closing/transfer fee.
tj
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by tj »

czaj wrote: Sat Jun 19, 2021 9:29 am
Barefootgirl wrote: Sat Jun 19, 2021 9:20 am So, I called HSA Bank to move the entire remaining balance to TDA. The HSABank rep told me I cannot do that because I need to maintain a $1K minimum balance at HSABank at all times...but I told her I was closing out both accounts and moving them to Fidelity. She said I can't move the balance. I have to close out HSA Bank with the $1K balance I have left it...so it looks like BOTH accounts will transfer to Fidelity.

One with cash in it and one with ETFs and a mutual fund in it.

:oops:
Have you tried transferring it to TD yourself? I found that my account says it has a minimum, but I’m still able to transfer.

Another option is to just withdraw the amount in HSA Bank if you have enough in eligible expenses. Then you can at least save on the closing/transfer fee.
Lucky you. they started enforcing the minimum sometime last year.
czaj
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by czaj »

tj wrote: Sat Jun 19, 2021 11:05 am
czaj wrote: Sat Jun 19, 2021 9:29 am
Barefootgirl wrote: Sat Jun 19, 2021 9:20 am So, I called HSA Bank to move the entire remaining balance to TDA. The HSABank rep told me I cannot do that because I need to maintain a $1K minimum balance at HSABank at all times...but I told her I was closing out both accounts and moving them to Fidelity. She said I can't move the balance. I have to close out HSA Bank with the $1K balance I have left it...so it looks like BOTH accounts will transfer to Fidelity.

One with cash in it and one with ETFs and a mutual fund in it.

:oops:
Have you tried transferring it to TD yourself? I found that my account says it has a minimum, but I’m still able to transfer.

Another option is to just withdraw the amount in HSA Bank if you have enough in eligible expenses. Then you can at least save on the closing/transfer fee.
Lucky you. they started enforcing the minimum sometime last year.
I actually don't see a minimum stated on my account anymore. Perhaps my employer plan doesn't require a minimum. HSA Bank's language has never been very clear.
Barefootgirl
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by Barefootgirl »

Another option is to just withdraw the amount in HSA Bank if you have enough in eligible expenses. Then you can at least save on the closing/transfer fee.

I do have enough eligible expenses....so what are the mechanics? HSA Bank sends me a check for the balance in the account, I match the balance to medical receipts and when 2021 tax season rolls around, I do what? Presumably HSA Bank will send some kind of notice of the withdrawal to me....and the IRS.

Thanks
How many retired people does it take to screw in a lightbulb? Only one, but he takes all day.
tj
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by tj »

Barefootgirl wrote: Sat Jun 19, 2021 3:21 pm Another option is to just withdraw the amount in HSA Bank if you have enough in eligible expenses. Then you can at least save on the closing/transfer fee.

I do have enough eligible expenses....so what are the mechanics? HSA Bank sends me a check for the balance in the account, I match the balance to medical receipts and when 2021 tax season rolls around, I do what? Presumably HSA Bank will send some kind of notice of the withdrawal to me....and the IRS.

Thanks
you fill out the qualified distribution line on the HSA tax form.
czaj
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by czaj »

Barefootgirl wrote: Sat Jun 19, 2021 3:21 pm Another option is to just withdraw the amount in HSA Bank if you have enough in eligible expenses. Then you can at least save on the closing/transfer fee.

I do have enough eligible expenses....so what are the mechanics? HSA Bank sends me a check for the balance in the account, I match the balance to medical receipts and when 2021 tax season rolls around, I do what? Presumably HSA Bank will send some kind of notice of the withdrawal to me....and the IRS.

Thanks
You should be able to transfer it to your checking account (as opposed to a check). HSA Bank will send you a 1099-SA, which you'll report on Form 8889 for 2021. Keep your $1,000 worth of medical receipts as documentation if the IRS wishes to see them.
Barefootgirl
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by Barefootgirl »

Thank you!
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lexor
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Re: [Fidelity Health Savings Account Mega-Thread]

Post by lexor »

index2max wrote: Fri Apr 16, 2021 4:08 pm
snowman wrote: Fri Apr 16, 2021 3:58 pm
index2max wrote: Fri Apr 16, 2021 3:49 pm I guess I'd like to save on the $18/year Devenir charges me through Further to invest my HSA dollars over the $1000 minimum threshold that I have in Vanguard index funds currently. You have all convinced me to make the switch! Still consider myself a Vanguard die-hard though.
And that's precisely why Fidelity did it - there is nobody out there offering better HSA account, not even close. So even a Vanguard diehard like yourself who will try Fidelity products and services will want to transfer more of their money to Fidelity. Win-win.
Don't think I'll do any other business with Fidelity other than use them as a loss-leader for my HSA investing. This probably explains why Vanguard won't get into this game. They don't want to get into the loss-leader marketing model for their products.

Still, costs matter and I hate throwing away $18/year just to buy some Vanguard funds through Devenir. Guess Fidelity's got my HSA business.

Maybe they can still make money lending securities held by the FZROX mutual fund, even ones inside HSAs to make money? IDK
Fidelity's security lending is used to benefit fund shareholders. It's a misnomer on these forums that only Vanguard does this, when AFAIK most if not all providers do it. On top of that, Fidelity's security lending program generates more revenue than Vanguard's.
Fidelity is not receiving any revenue from the Fidelity ZERO Index funds for securities lending. Nor is Fidelity currently receiving any portion of the income that is generated from securities lent out
“The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.” -Mr. John C. Bogle
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