About Choosing an HSA Account

If you have a high-deductible health plan, you can fund that high deductible and save money on taxes at the same time by creating a health savings account. Health savings accounts are offered by a number of different financial institutions, including banks, brokerage firms and mutual fund companies. Choosing the right HSA administrator means looking at both expenses and investment options.

Administrative Costs

• You can choose from a number of different administrators when you open a health savings account, and that gives you the opportunity to shop around for the plan with the best terms and conditions. Some banks, mutual fund companies and brokerage firms charge a setup fee for their health savings accounts, while others do not. In addition, some administrators charge a quarterly or yearly maintenance fee, while others provide those services free of charge. Trimming costs can mean more money to spend on health care, so it is important to keep your expenses under control.

Investment Options

• You can invest some of the money in your health savings account in mutual funds and other investments, and this can be a tempting option if you have a high balance and want to make your money grow. You should, of course, keep the money you expect to need right away in a safe investment such as a checking account, but it can make sense to put some of it into mutual funds for future growth. If a wide range of investment options is important to you, a mutual fund company or brokerage firm might be able to provide more choices than a bank. Be sure you understand the investment choices available to you before you open your HSA.

Contribution Choices

• When you open a health savings account, you should choose an administrator that gives you several different options for funding that account. For instance, you might want to transfer a set amount of money from your checking or savings account each month. If so, it could make sense to open a health savings account at the same bank to make transfers easier. If you prefer to make lump sum payments instead, that might not be as important.

Debit Card

• Look for a health savings account that provides you with a debit card you can use for eligible purchases. Having a debit card for your HSA makes it much easier to access the funds you have on deposit, without having to complete and submit complicated claim forms. The debit card you receive will contain the Visa or Mastercard logo, just like the ATM card for your checking account. The difference is that this special debit card can only be used for eligible medical and health care purchases.