HSA: Health Equity vs. Fidelity

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dunk1234
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HSA: Health Equity vs. Fidelity

Post by dunk1234 »

Hi,

I know it's common for those with employer contributions to have two HSA's. I am going to try to get my employer to consider switching to Fidelity HSA, our 401k is already with Fidelity.

My question is has there been an in-depth side-by-side comparison of these two HSA vendors? I could not find one.

I am totally boggled that HE requires me to keep $2k in cash. I understand Fidelity has $0 cash minimum...

Thanks.
Mike Scott
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Re: HSA: Health Equity vs. Fidelity

Post by Mike Scott »

You can just open your own at Fidelity. Either make your own contributions directly or move your employer funded HSA account funds to Fidelity periodically. We do some of both. I make direct contributions and the extra $1000. My spouse maxes her payroll deduction of HSA (including employer contribution and +$1000) and then we transfer that balance out once a year after reimbursing eligible costs.
Charon
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Re: HSA: Health Equity vs. Fidelity

Post by Charon »

Mike Scott wrote: Sun Mar 13, 2022 12:43 pm You can just open your own at Fidelity.
+1

The investment cost at Heath Equity is terrible. It does depend a bit on what the agreement with your employer is, but I was charged 0.36% per year just to be allowed to invest.

It's minor hassle to keep transferring funds, but if you do it 1-3 times a year it's not the end of the world.
cas
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Re: HSA: Health Equity vs. Fidelity

Post by cas »

dunk1234 wrote: Sun Mar 13, 2022 12:34 pm My question is has there been an in-depth side-by-side comparison of these two HSA vendors? I could not find one.
Morningstar puts out an "HSA Landscape" report once a year:
In this report, we evaluate 11 of the largest HSA providers to help provide clarity to investors about this often opaque and evolving space.
You need at least the free version of the Morningstar login to download it, IIRC. (Edit: seems like the download link isn't working on my browser for the link I gave. I didn't troubleshoot it further. There is a short summary of the long report here: https://www.morningstar.com/articles/10 ... ns-of-2021 ) (Edit #2: It was the privacy add-on on my browser that was blocking the download link. Once I turned that off, everything was fine.)

I think it used to be oriented around the versions of HSAs available to employers (terms are often negotiable, especially to big employers), but then they switched in more recent years to versions available retail.

And you have to decide whether you (or your employer) care about the particular metrics that Morningstar decided to compare.
Topic Author
dunk1234
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Re: HSA: Health Equity vs. Fidelity

Post by dunk1234 »

Thank you.
newbie2022
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Re: HSA: Health Equity vs. Fidelity

Post by newbie2022 »

wondering what you decided to do - am facing the option of employer-provided health equity or opening my own and am favoring fidelity. thanks for any advice
Gnick
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Re: HSA: Health Equity vs. Fidelity

Post by Gnick »

I just leave it in cash so I don't have to pay any fees and then transfer all but what is required to fidelity a couple of times a year.

i just switched jobs to a company that uses Avidia. This is going to be a whole new exercise. Health Equity was annoying with their fees, but at least it was pretty easy to transfer the cash.
DN28
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Re: HSA: Health Equity vs. Fidelity

Post by DN28 »

I've had a HSA at both companies, and recommend Fidelity.
TropikThunder
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Re: HSA: Health Equity vs. Fidelity

Post by TropikThunder »

dunk1234 wrote: Sun Mar 13, 2022 12:34 pm Hi,

I know it's common for those with employer contributions to have two HSA's. I am going to try to get my employer to consider switching to Fidelity HSA, our 401k is already with Fidelity.

My question is has there been an in-depth side-by-side comparison of these two HSA vendors? I could not find one.

I am totally boggled that HE requires me to keep $2k in cash. I understand Fidelity has $0 cash minimum...

Thanks.
Not sure what more of a comparison you need.
dcabler
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Re: HSA: Health Equity vs. Fidelity

Post by dcabler »

dunk1234 wrote: Sun Mar 13, 2022 12:34 pm Hi,

I know it's common for those with employer contributions to have two HSA's. I am going to try to get my employer to consider switching to Fidelity HSA, our 401k is already with Fidelity.

My question is has there been an in-depth side-by-side comparison of these two HSA vendors? I could not find one.

I am totally boggled that HE requires me to keep $2k in cash. I understand Fidelity has $0 cash minimum...

Thanks.
There isn't much to compare.
- HE (for you) requires you to keep $2K in cash if you're also investing. This varies by employer btw. Mine requires $1K. Fidelity has no minimum.
- HE charges a percentage of your investments on top of the e/r that the individual funds. Fidelity has no such charge
- HE has a list of predefined investments to choose from. Fidelity lets you invest in pretty much whatever you want that can be purchased on the open market

You have to keep track of your medical expenses for reimbursement with Fidelity, but that's not exactly onerous.

Right now I only have the $25 in cash sitting over at HE so that the account isn't closed. Everything else is at Fidelity. My plans were to retire this year and I would then close the HE account. But at the moment my employment may leak over into early next year, so keeping the HE account open for now just in case.

Cheers
Oddball
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Re: HSA: Health Equity vs. Fidelity

Post by Oddball »

I finally got around to setting up an HSA account at Fidelity, like the OP my 401k is with Fidelity but the HSA is with Health Equity $1000 cash min required. Knowing that I am paying ~$70 a year now at HE, which will only go up over time, glad I finally did it. Fidelity had the expected transfer completion date set of Sept 6, transferred everything but ~$1000. Seems like next time I transfer, I should just transfer the whole balance?
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Tubes
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Re: HSA: Health Equity vs. Fidelity

Post by Tubes »

Best thing I did was move my HE HSA to Fidelity. Others have said why above. Let me add one more:

If all you have at Fidelity is "Netbenefits" 401k, you don't have full access to Fidelity's tools. Once you open an HSA, you open a window to the main brokerage landing screen. From here, you get access to a few more tools like their portfolio analyzer. Since Vanguard broke their portfolio watch tool (https://bogleheads.org/forum/viewtopic.php?t=345383), I'm finding the Fidelity analysis tool to be very useful.
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Re: HSA: Health Equity vs. Fidelity

Post by the_wiki »

dunk1234 wrote: Sun Mar 13, 2022 12:34 pm

I am totally boggled that HE requires me to keep $2k in cash. I understand Fidelity has $0 cash minimum...

Thanks.


Even if Fidelity allows you to invest everything, it would generally be unwise to do so. The main point of the account is to pay for medical expenses. And eligibility requires you have a health plan with a high deductible. At any moment you could end up needing to fund your whole deductible for medical emergency.
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anon_investor
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Re: HSA: Health Equity vs. Fidelity

Post by anon_investor »

the_wiki wrote: Fri Aug 12, 2022 12:10 pm
dunk1234 wrote: Sun Mar 13, 2022 12:34 pm

I am totally boggled that HE requires me to keep $2k in cash. I understand Fidelity has $0 cash minimum...

Thanks.


Even if Fidelity allows you to invest everything, it would generally be unwise to do so. The main point of the account is to pay for medical expenses. And eligibility requires you have a health plan with a high deductible. At any moment you could end up needing to fund your whole deductible for medical emergency.
That's not the BH way to use a HSA. I have my HSA at Fidelity invested in FZROX.
the_wiki
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Re: HSA: Health Equity vs. Fidelity

Post by the_wiki »

anon_investor wrote: Fri Aug 12, 2022 12:39 pm
the_wiki wrote: Fri Aug 12, 2022 12:10 pm
dunk1234 wrote: Sun Mar 13, 2022 12:34 pm

I am totally boggled that HE requires me to keep $2k in cash. I understand Fidelity has $0 cash minimum...

Thanks.


Even if Fidelity allows you to invest everything, it would generally be unwise to do so. The main point of the account is to pay for medical expenses. And eligibility requires you have a health plan with a high deductible. At any moment you could end up needing to fund your whole deductible for medical emergency.
That's not the BH way to use a HSA. I have my HSA at Fidelity invested in FZROX.

So you just pay medical expenses with after tax dollars then? Sell stocks when you have a medical bill and hope your portfolio didn't drop too far? This seems like trying to invest your emergency fund.

Investing is a good idea, but you need money for medical expenses, too, so investing 100% of your fund sounds like a bad idea. HealthEquity only keeps a $2k buffer. Even that seems a little low.
cowbman
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Re: HSA: Health Equity vs. Fidelity

Post by cowbman »

the_wiki wrote: Fri Aug 12, 2022 4:16 pm
anon_investor wrote: Fri Aug 12, 2022 12:39 pm
the_wiki wrote: Fri Aug 12, 2022 12:10 pm
dunk1234 wrote: Sun Mar 13, 2022 12:34 pm

I am totally boggled that HE requires me to keep $2k in cash. I understand Fidelity has $0 cash minimum...

Thanks.


Even if Fidelity allows you to invest everything, it would generally be unwise to do so. The main point of the account is to pay for medical expenses. And eligibility requires you have a health plan with a high deductible. At any moment you could end up needing to fund your whole deductible for medical emergency.
That's not the BH way to use a HSA. I have my HSA at Fidelity invested in FZROX.

So you just pay medical expenses with after tax dollars then? Sell stocks when you have a medical bill and hope your portfolio didn't drop too far? This seems like trying to invest your emergency fund.

Investing is a good idea, but you need money for medical expenses, too.
Lots of BHers will use taxable money for expenses now and hold the receipts, while giving their HSA potentially decades to grow before recouping reimbursement. A HSA can be used as combination IRA/Roth where money goes in tax free, grows tax free, and comes out tax free.
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Re: HSA: Health Equity vs. Fidelity

Post by anon_investor »

cowbman wrote: Fri Aug 12, 2022 4:20 pm
the_wiki wrote: Fri Aug 12, 2022 4:16 pm
anon_investor wrote: Fri Aug 12, 2022 12:39 pm
the_wiki wrote: Fri Aug 12, 2022 12:10 pm
dunk1234 wrote: Sun Mar 13, 2022 12:34 pm

I am totally boggled that HE requires me to keep $2k in cash. I understand Fidelity has $0 cash minimum...

Thanks.


Even if Fidelity allows you to invest everything, it would generally be unwise to do so. The main point of the account is to pay for medical expenses. And eligibility requires you have a health plan with a high deductible. At any moment you could end up needing to fund your whole deductible for medical emergency.
That's not the BH way to use a HSA. I have my HSA at Fidelity invested in FZROX.

So you just pay medical expenses with after tax dollars then? Sell stocks when you have a medical bill and hope your portfolio didn't drop too far? This seems like trying to invest your emergency fund.

Investing is a good idea, but you need money for medical expenses, too.
Lots of BHers will use taxable money for expenses now and hold the receipts, while giving their HSA potentially decades to grow before recouping reimbursement. A HSA can be used as combination IRA/Roth where money goes in tax free, grows tax free, and comes out tax free.
Bingo. I can easily cashflow medical expenses and get CC rewards too.
anhonymous
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Re: HSA: Health Equity vs. Fidelity

Post by anhonymous »

I know this is an old thread but my question is similar to what has been discussed here. First time doing HSA and they administered through Health Equity. Rest of my benefits is with Fidelity .
Question is can I simply invest my $ in a fidelity HSA and have employer $ in HE? Or do I have to invest in HE and then look for periodic transfer to Fidelity?
Thanks for any clarification.
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Re: HSA: Health Equity vs. Fidelity

Post by retiringwhen »

anhonymous wrote: Tue Oct 31, 2023 4:32 pm I know this is an old thread but my question is similar to what has been discussed here. First time doing HSA and they administered through Health Equity. Rest of my benefits is with Fidelity .
Question is can I simply invest my $ in a fidelity HSA and have employer $ in HE? Or do I have to invest in HE and then look for periodic transfer to Fidelity?
Thanks for any clarification.
You can contribute to the Fidelity HSA as long as your annual total, including employer contributions does not exceed the annual limit. Let the HE HSA money pile up and transfer it every so often to allow for investing at Fidelity.

The only question about the Fido contribution is that you miss out on lowering your Social Security and Medicare taxes by not contributing via payroll deduction.

This is a mixed blessing. If you are at less then max SS, then it allows your SS earnings to grow a bit more at the cost of paying the tax.

If you are above the SS limit, you don't care for the most part since the savings would be minimal, just Medicare tax @ 1.45%.
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Re: HSA: Health Equity vs. Fidelity

Post by grabiner »

anon_investor wrote: Fri Aug 12, 2022 12:39 pm
the_wiki wrote: Fri Aug 12, 2022 12:10 pm Even if Fidelity allows you to invest everything, it would generally be unwise to do so. The main point of the account is to pay for medical expenses. And eligibility requires you have a health plan with a high deductible. At any moment you could end up needing to fund your whole deductible for medical emergency.
That's not the BH way to use a HSA. I have my HSA at Fidelity invested in FZROX.
This depends on your situation. If you aren't maxing out retirement accounts, it is better to use the HSA for current expenses, as this allows you to put more in an IRA or 401(k) with better withdrawal options. If you are maxing out, it is better to save the HSA for retirement.
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Re: HSA: Health Equity vs. Fidelity

Post by anhonymous »

:moneybag
retiringwhen wrote: Tue Oct 31, 2023 5:46 pm
You can contribute to the Fidelity HSA as long as your annual total, including employer contributions does not exceed the annual limit. Let the HE HSA money pile up and transfer it every so often to allow for investing at Fidelity.

The only question about the Fido contribution is that you miss out on lowering your Social Security and Medicare taxes by not contributing via payroll deduction.

This is a mixed blessing. If you are at less then max SS, then it allows your SS earnings to grow a bit more at the cost of paying the tax.

If you are above the SS limit, you don't care for the most part since the savings would be minimal, just Medicare tax @ 1.45%.
[/quote]

Thank you for taking time to respond. How would I actually have Fidelity take a pretax deduction for HSA? Is there a provision at Fidelity to do that directly from
Employee pay check?
retiringwhen
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Re: HSA: Health Equity vs. Fidelity

Post by retiringwhen »

anhonymous wrote: Tue Oct 31, 2023 10:21 pm
retiringwhen wrote: Tue Oct 31, 2023 5:46 pm You can contribute to the Fidelity HSA as long as your annual total, including employer contributions does not exceed the annual limit. Let the HE HSA money pile up and transfer it every so often to allow for investing at Fidelity.

The only question about the Fido contribution is that you miss out on lowering your Social Security and Medicare taxes by not contributing via payroll deduction.

This is a mixed blessing. If you are at less then max SS, then it allows your SS earnings to grow a bit more at the cost of paying the tax.

If you are above the SS limit, you don't care for the most part since the savings would be minimal, just Medicare tax @ 1.45%.
Thank you for taking time to respond. How would I actually have Fidelity take a pretax deduction for HSA? Is there a provision at Fidelity to do that directly from
Employee pay check?
You just send money to Fidelity however you want, but unless your employer supports payroll deductions with Fidelity, you have to do it yourself from funds outside your paycheck.

The deduction is simply putting that amount on the correct entry in one of the schedules on your annual 1040 form, not too different than a traditional IRA (but a different entry!)
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Re: HSA: Health Equity vs. Fidelity

Post by mikejuss »

dunk1234 wrote: Sun Mar 13, 2022 12:34 pm I know it's common for those with employer contributions to have two HSA's.
Not sure what you mean by this, OP.
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Re: HSA: Health Equity vs. Fidelity

Post by retiringwhen »

mikejuss wrote: Wed Nov 01, 2023 8:21 am
dunk1234 wrote: Sun Mar 13, 2022 12:34 pm I know it's common for those with employer contributions to have two HSA's.
Not sure what you mean by this, OP.
Well, normally the employer HSA provided by companies like HSA Bank or HealthEquity are good at handling the employer relationship and often have reasonably advanced reimbursement systems. But, their investment offerings and fees are terrible.

So, if one is looking to invest HSA money for the long-term, then Fidelity is usually the place to move the long-term money to avoid fees and improve investment options.

Personally, we cash flow our medical expenses through our HSA, and invest the leftovers each year. I use my employers HealthEquity account to manage the cash flow and payroll deductions and I use Fidelity for the left-overs that get invested after transferring from HE.
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Re: HSA: Health Equity vs. Fidelity

Post by mikejuss »

retiringwhen wrote: Wed Nov 01, 2023 8:29 am
mikejuss wrote: Wed Nov 01, 2023 8:21 am
dunk1234 wrote: Sun Mar 13, 2022 12:34 pm I know it's common for those with employer contributions to have two HSA's.
Not sure what you mean by this, OP.
Well, normally the employer HSA provided by companies like HSA Bank or HealthEquity are good at handling the employer relationship and often have reasonably advanced reimbursement systems. But, their investment offerings and fees are terrible.

So, if one is looking to invest HSA money for the long-term, then Fidelity is usually the place to move the long-term money to avoid fees and improve investment options.

Personally, we cash flow our medical expenses through our HSA, and invest the leftovers each year. I use my employers HealthEquity account to manage the cash flow and payroll deductions and I use Fidelity for the left-overs that get invested after transferring from HE.
I'm not sure having two HSAs is common. I imagine most people contribute to an HSA, as with a 401(k), through pretax payroll deductions, regardless of whatever HSA bank one's employer has a relationship with. I guess I'm lucky my current employer uses Fidelity, but, in the past, I've had Optum Bank and HSA Bank, and I found there were perfectly fine index funds among the investment options.
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Re: HSA: Health Equity vs. Fidelity

Post by dcabler »

dunk1234 wrote: Sun Mar 13, 2022 12:34 pm Hi,

I know it's common for those with employer contributions to have two HSA's. I am going to try to get my employer to consider switching to Fidelity HSA, our 401k is already with Fidelity.

My question is has there been an in-depth side-by-side comparison of these two HSA vendors? I could not find one.

I am totally boggled that HE requires me to keep $2k in cash. I understand Fidelity has $0 cash minimum...

Thanks.
My last employer before retirement was also with HE. How much HE requires someone to keep in Cash is totally between HE and the employer. In other words, if varies employer to employer. When I first joined my last employer, they required $1K in Cash. Then they dropped the entire requirement, other than to keep at least $25 in the account to keep it open.

Other than that.
1. HE keeps track of all of your medical expenses and makes it easy to reimburse yourself if that's how you want to operate. They also have a debit card that you can use to directly pay for things like prescriptions. Those were about the only benefits I saw. But I didn't spend from the HSA while I worked there so neither of those things mattered to me. And I kept all receipts for future reimbursement. On the downside, they charge you an additional fee if you invest any of your HSA - this is on top of the e/r that the individual funds have. And, like a lot of 401K's, depending on what investments your employer chose, they choices might not be so great. My employer chose to make the same investments available as was available in our 401K.
2. Fidelity lets you invest in pretty much anything you want to invest in, subject to the same sorts of rules they have for any other account. And there is no fee to do so. Spending, reimbursing yourself, etc. is all on you.

As soon as I found out about Fidelity, I moved all but the $25 (required to keep the account open) to Fidelity, which is convenient because they are already my brokerage for my taxable account and our IRAs. Every 3 paychecks from that point on, I moved whatever was in cash at HE over to Fidelity. Never looked back.

Before this year, my employer let us front load our HSA. They changed administrators and the new administrator had no concept of front-loading. When I retired mid summer, I went on Cobra, making me still eligible for the HSA. I then topped it off to the max for 2023 by making a deposit into Fidelity myself.

2024 is currently TBD.

Cheers.
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Re: HSA: Health Equity vs. Fidelity

Post by mikejuss »

dcabler wrote: Wed Nov 01, 2023 9:01 am Before this year, my employer let us front load our HSA.
Doesn't an employee's enrollment in a high-deductible health plan have to be confirmed month in and month out in order to contribute to an HSA? Every employer I've had allows HSA contributions strictly allotted across each month of a year. I have, however, been able to front-load my 401(k) contributions at the beginning of each year.
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Re: HSA: Health Equity vs. Fidelity

Post by dcabler »

mikejuss wrote: Wed Nov 01, 2023 9:20 am
dcabler wrote: Wed Nov 01, 2023 9:01 am Before this year, my employer let us front load our HSA.
Doesn't an employee's enrollment in a high-deductible health plan have to be confirmed month in and month out in order to contribute to an HSA? Every employer I've had allows HSA contributions strictly allotted across each month of a year. I have, however, been able to front-load my 401(k) contributions at the beginning of each year.
I front loaded for 5 years before they went to an outside company for benefits administration. They told several of us who had been front loading that the reason they couldn't was because the outside company's software didn't contemplate that possibility, unlike the previously used internal software and that they would put in the request for the following year to add this capability.

There is definitely a monthly based eligibility requirement for HSA's, but if an employee front-loaded and then left the company mid-year and was no longer eligible for an HSA the remainder of the year, there was a claw-back mechanism. But I seem to recall that it was on the former employee to deeal with if they wanted to avoid penalties.

I frontloaded 401K as well.
 
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Re: HSA: Health Equity vs. Fidelity

Post by mikejuss »

dcabler wrote: Wed Nov 01, 2023 12:43 pm
mikejuss wrote: Wed Nov 01, 2023 9:20 am
dcabler wrote: Wed Nov 01, 2023 9:01 am Before this year, my employer let us front load our HSA.
Doesn't an employee's enrollment in a high-deductible health plan have to be confirmed month in and month out in order to contribute to an HSA? Every employer I've had allows HSA contributions strictly allotted across each month of a year. I have, however, been able to front-load my 401(k) contributions at the beginning of each year.
There is definitely a monthly based eligibility requirement for HSA's, but if an employee front-loaded and then left the company mid-year and was no longer eligible for an HSA the remainder of the year, there was a claw-back mechanism. But I seem to recall that it was on the former employee to deeal with if they wanted to avoid penalties.
I believe this issue is sorted out when tax time comes, via Form 1095-A, which is a record of what months out of a year that a person has employee-sponsored health-care coverage.
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Re: HSA: Health Equity vs. Fidelity

Post by MP123 »

mikejuss wrote: Wed Nov 01, 2023 12:56 pm
dcabler wrote: Wed Nov 01, 2023 12:43 pm
mikejuss wrote: Wed Nov 01, 2023 9:20 am
dcabler wrote: Wed Nov 01, 2023 9:01 am Before this year, my employer let us front load our HSA.
Doesn't an employee's enrollment in a high-deductible health plan have to be confirmed month in and month out in order to contribute to an HSA? Every employer I've had allows HSA contributions strictly allotted across each month of a year. I have, however, been able to front-load my 401(k) contributions at the beginning of each year.
There is definitely a monthly based eligibility requirement for HSA's, but if an employee front-loaded and then left the company mid-year and was no longer eligible for an HSA the remainder of the year, there was a claw-back mechanism. But I seem to recall that it was on the former employee to deeal with if they wanted to avoid penalties.
I believe this issue is sorted out when tax time comes, via Form 1095-A, which is a record of what months out of a year that a person has employee-sponsored health-care coverage.
1095 series forms (-A,B,C) do provide information about health insurance coverage. But they don't report whether the coverage is HDHP and even if they did there are other reasons why an individual with HDHP coverage might still be HSA ineligible.

So the reconciliation of allowable HSA contribution to the actual amount contributed happens on Form 8889, with the individual responsible to remove any excess contribution or pay 6% excise tax on it. It's essentially on the honor system but subject to audit.
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Re: HSA: Health Equity vs. Fidelity

Post by anhonymous »

Thank you for all the feedback!!! I did not realize that the post HSA and Pre HSA have almost similar end result. Thanks.
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