What is Health Saving Account (HSA)
Health Saving account let qualify participant to contribute before tax money into the account to pay for future qualify medical expense. As of 2010, a participant of HSA’s health insurance should have minimum deductible for single person between $1,200 and $5,950; $2,400 to $11,900 for a family. Participant can contribute $3,050 for single person and $6,150 for family before tax. An additional $1,000 contribution is tax free for any participant 55 or older.
Unlike Medical Flexible Spending account, any money not use in the calender year carry over to next year tax free. If you meet your plan’s requirement, you can invest your extra money in mutual fund or stock tax free until you withdraw it. If you withdraw your money for non-qualify medical expense, you will subject to 10% penalty in addition to regular income tax. See HSA on Wikipedia.com for more details.
You should not confuse HSA account with your regular health insurance. You should have a qualified health insurance before you can have a HSA account. However, you do not need to open a HSA account if you do not want to have one.
Criteria for selecting a Health Saving Account Administrator
- It should be easy for employees to access account balance
- It should be easy for employer and employee to access account statement
- It should be easy for employer and employee to setup accounts
- It should be easy for employer and employee to contribute to accounts
- Account fee should be low.
- Account balance should earn as high interest as possible.
- If every thing is equal, select the one provides better investment options so employees can put their surplus money to work.
1. Bank of North Georgia (http://www.banknorthgeorgia.com/index.cfm?ID=26)
Benefits: Branch Teller can Accepts contribution/FDIC insured/2 free VISA check cards/Custom Check/Online access
Fees: $3 monthly fee for balance less than $2,500/ $1 per check fee / $4 to replace check card / Tiered interest rate on balance
Investment: Minimum balance $3,500 / 7 Fidelity Mutual funds / Minimum intial investment $2,500 / Increment investment : 100
2. Chase Bank (https://www.chase.com/ccp/index.jsp?pg_name=ccpmapp/shared/assets/page/hsa_home)
Benefits: FDIC insured on checking account/0.4% interest rate on saving as 6/1/2010 / Visa Check card / Checks / Online access
Fees: $2.50 monthly fee / $2.50 additional fee for investment option and mutual fund fees
Investment: Funds from JP Morgan and American Century Funds.
Type: Individual enroment only
3. Wells Fargo Bank (https://www.wellsfargo.com/investing/hsa/index): telephone: 1-877-842-5785
Benefits: FDIC insured on checking account/0.25% interest rate on balance less than $5K / Visa Check card / Checks / Online access
Fees: $4.25 monthly fee
Investment: Wells Fargo Advantage Funds with $2,000 minimum.
Type: Individual and Employer enrollment.
4. HSABank (http://www.hsabank.com/HSABank/Accountholders.aspx) Telephone: 866-357-5232
Benefits: FDIC insured on checking account/0.85% interest rate on balance between $2.5K to $5K / Visa Check card / Checks / Online access
Fees: $2.25 monthly fee / $7.95 for 50 checks
Investment: Self direct investment with TD- AmeriTrade with $3,000 minimum.
Type: Individual and Employer enrollment.
5. American Health Value (https://ahvthebancorp.mybankingservices.com/) Tel: 800-914-3248
Benefits: FDIC insured on checking account/0.05% interest rate on balance up to$5K / free Visa Check card / Checks / Online access
Fees: $3.00 monthly fee
Investment: Fidelity Investment funds with $2,500 minimum.
Type: Individual and Employer enrollment.
6. StateFarm (http://www.statefarm.com/bank/disclosures/d_truth.asp#hsa)
Benefits: Similar as other / 0.91% for balance up to $5k.
Fees: $25/year
Investment: none
7. US Bank (http://www.usbank.com/cgi_w/cfm/personal/products_and_services/savings/hsa_personal.cfm)
Benefits: Similar as other / 0.21% for balance up to $5K
Fees: $2.50/month
Investment: none
Summary:
After comparing interest rate on bank balance and investment option, I settled on HSA Bank. A further check shows that HSA Bank is in good standing with Better Business Bureau. It parent bank Webster Bank N.A. is covered by FDIC list on NYSE with ticker WBS. A quick search in WBS annual report verify that HSA Bank is a division of Webster Bank. HSA Bank is a valid bank on health saving account.
HSA Bank is convenient to use for both employers and employees. The telephone support was fast and knowledgeable.
American Health Value is the runner up with less investment options.