Health Savings Account

So during benefits election last year at Microsoft, I had opted to try their new HSA (Health Savings Account) health insurance plan. Given that I hardly ever used my health insurance, having a tax-deductible/tax-free account that I can keep around for later use for health-related expenses made sense. There was also the fact that the $1,500 amount that Microsoft contributed to my HSA pretty much covered the entire deductible, meaning at most I’d have to shell out ~$100 and have the exact same medical benefits that the original premium plan.

After leaving Microsoft and looking back, it turned out to be a much better decision than I had originally anticipated. I got to keep the money they had already contributed to my account and instead of paying close to $1000/mo for premium health insurance, I only have to pay $289/mo (which includes both dental and vision). The fact that I’m still on a HDHP (high-deductible health plan) means I still qualify to contribute to my HSA.

So one of the downside is that UMB (the bank where my HSA is located) charges a $5.50 monthly fee. When I worked at Microsoft, they took care of the fee. This fee has been slowly eating away at my savings. I finally got off my lazy ass and inquired if there was a way to waive the fee (e.g. minimum balance or monthly deposits). Unfortunately, the UMB rep I spoke with said there wasn’t any way to waive the fee.

I also found out that the yearly contribution limit is $3,050 for individuals and unlike our 401K, the $1,500 that Microsoft contributed counts towards that limit. That means for 2011, I can still contribute $1,550. The limit goes up to $3,100 for 2012.

I then asked what the procedures for transferring my HSA account to another bank was and it turned out to be rather simple. I need to get the Trustee to Trustee transfer form from the bank I want to transfer to and submit it to UMB. There’s a small fee of $15 to transfer, but it sounds simple enough.

I started researching on HSA providers and found that most charge a monthly or annual fee and hardly anyone waives them, though most of them were cheaper than UMB (usually ranging between $2-3/mo or $25/yr). The best one I’ve found so far is US Bank which has a monthly fee of $2.50 but can be waived if the account balance is $2,500 or more.

Another thing I’ve been looking for are accounts which let me invest the savings (stock market/mutual funds). I did find a couple, but still am researching on which one is the best.

If anyone has any advice or recommendations, I’m all ears. (^_^x)