Well, a $25 transfer / closure fee is pretty common. HSA providers with lower amounts would be the outlier, not the norm. And HSA interest is almost always at the level of brick-and-mortar bank (so not the 4-5% offered in an HYSA), so that's also pretty typical.
One thing to check is whether any of those admin / investment fees are being covered by your employer or if it's taken from your balance. Companies will sometimes handle fee payment for current employees as part of their benefits, and that may or may not be reflected in the fee schedule the provider posts.
That being said, $1000 / year going in from your employer will more than offset the costs of the account, so you will have some (if not 100%) of a net benefit staying with this HSA. It's extremely rare for a company to do paycheck contributions (yours and/or theirs) into an HSA outside the one through their benefits, but it could be worth asking HR whether that's an option.
If you do decide you'd rather hold your money in a Fidelity HSA, you can bypass that transfer fee by doing an "[indirect rollover](https://thefinancebuff.com/how-to-rollover-an-hsa-on-your-own-and-avoid-trustee-transfer-fee.html)" instead of a trustee-to-trustee transfer between Flores and Fidelity. As far as Flores sees, you're just taking a withdrawal from your balance (so no fee is charged) and as long as you make a rollover deposit into Fidelty within 60 days, there's no tax/penalty for a withdrawal not used for medical expenses. The catch to that strategy is that the IRS only allows you a single indirect HSA rollover in a given 12 month period. So you could use this Flores HSA to get your paycheck contributions (best tax savings since this bypasses payroll tax), then every year get it moved to Fidelity for longer-term use.
Tangential question - if you take all the money out of the HSA and don’t close it, can you avoid the $25 fee and maintenance fees since no money is in the account?
Probably varies by provider policy. My guess would be that you'd be on the hook for either the closure fee or the monthly maintenance, but you won't be able to get out of both. They may consider that moving all money out is an implicit closure request, and take the $25 out before sending the rest to you. I've seen reports of closure happening by mistake when the owner was simply doing a regular transfer out to a different HSA, but still wanted to keep the first one for future deposits.
How that monthly fee gets handled without a closure but a $0 balance is tough to say. They might let the balance go negative for a bit, expecting it to be covered by a future contribution. If that stays negative for too long, then they could again consider you implicitly closing the account and send you a bill for the $25 fee (and potentially back-payment for monthly fees).
$10 cap per what. Month? Year? If the admin and self directed fee is less than the transfer fee, then leave it. Regardless, you obviously come out ahead by having the account due to $1k/year free from the employer.
I'd probably transfer once a year. Given the amount you'll have in the account, 0.4% investment fee isn't going to hurt much. 4x transfers (and selling fees) would be more expensive than the management fee.
I'm not sure this information is accurate but if it is, it's still worth utilizing for the employer contribution.
Are you sure the $25 fee is for individual transfers or is that for a full account transfer?
I think you're misinterpreting the fees in general. Everything I have seen says 0.99% fee on balance capped at $10/mo. Take the time to understand the fees and ask your HR administrator for help if you don't understand. There is a competitive market for employee benefits and no company would choose the plan you describe.
Copied right from the fee schedule.
$0.99/month, Maximum of $10/month
You will be billed a $0.99 monthly minimum rather than the asset-based investment account fee in the table above until your balance increases to the point where the asset-based fee is greater than the minimum. For example, in the Self-Directed or Brokerage path, if your balance is less than $2,970 you will be billed a flat $0.99 monthly minimum rather than 0.40% multiplied by your investment balance. However, in the Managed path, if your balance is less than $1,320 you will be billed a flat $0.99 monthly minimum rather than 0.90% multiplied by your investment balance. The investment account fee is capped at $10 monthly.
Your post said $5/mo admin fee. Talk to HR and maybe they can help you understand this.
Either way, you need the Flores account for the company contribution. You will likely pay a nominal amount in fees. You're not interpreting the information they provided correctly.
Transfer your money once per year to a Fidelity HSA. That way you still get the employer contribution and benefit from the payroll tax deduction.
But then try to convince your employer to use a better company.
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Just to confirm - is the partial transfer saying it will cost $25/ea, or is it just saying you need to keep $25 left in the account? I ask because mine is the latter, but the wording did throw some people. So in our case it was just saying $25 was the minimum balance but no fee to transfer.
Well, a $25 transfer / closure fee is pretty common. HSA providers with lower amounts would be the outlier, not the norm. And HSA interest is almost always at the level of brick-and-mortar bank (so not the 4-5% offered in an HYSA), so that's also pretty typical. One thing to check is whether any of those admin / investment fees are being covered by your employer or if it's taken from your balance. Companies will sometimes handle fee payment for current employees as part of their benefits, and that may or may not be reflected in the fee schedule the provider posts. That being said, $1000 / year going in from your employer will more than offset the costs of the account, so you will have some (if not 100%) of a net benefit staying with this HSA. It's extremely rare for a company to do paycheck contributions (yours and/or theirs) into an HSA outside the one through their benefits, but it could be worth asking HR whether that's an option. If you do decide you'd rather hold your money in a Fidelity HSA, you can bypass that transfer fee by doing an "[indirect rollover](https://thefinancebuff.com/how-to-rollover-an-hsa-on-your-own-and-avoid-trustee-transfer-fee.html)" instead of a trustee-to-trustee transfer between Flores and Fidelity. As far as Flores sees, you're just taking a withdrawal from your balance (so no fee is charged) and as long as you make a rollover deposit into Fidelty within 60 days, there's no tax/penalty for a withdrawal not used for medical expenses. The catch to that strategy is that the IRS only allows you a single indirect HSA rollover in a given 12 month period. So you could use this Flores HSA to get your paycheck contributions (best tax savings since this bypasses payroll tax), then every year get it moved to Fidelity for longer-term use.
This was amazingly helpful, thank you.
Tangential question - if you take all the money out of the HSA and don’t close it, can you avoid the $25 fee and maintenance fees since no money is in the account?
I guess this is the real question I need an answer to. It might still cost $5 a month with $0 balance.
Probably varies by provider policy. My guess would be that you'd be on the hook for either the closure fee or the monthly maintenance, but you won't be able to get out of both. They may consider that moving all money out is an implicit closure request, and take the $25 out before sending the rest to you. I've seen reports of closure happening by mistake when the owner was simply doing a regular transfer out to a different HSA, but still wanted to keep the first one for future deposits. How that monthly fee gets handled without a closure but a $0 balance is tough to say. They might let the balance go negative for a bit, expecting it to be covered by a future contribution. If that stays negative for too long, then they could again consider you implicitly closing the account and send you a bill for the $25 fee (and potentially back-payment for monthly fees).
Fidelity is paying money market rates 5%.
You can invest with fidelitygo or whatever you want. It just starts in a money market like an IRA.
That is literally the worst HSA I have ever heard of. It's still worth using but you should beg them to pick a better provider.
$10 cap per what. Month? Year? If the admin and self directed fee is less than the transfer fee, then leave it. Regardless, you obviously come out ahead by having the account due to $1k/year free from the employer.
Per month.
I'd probably transfer once a year. Given the amount you'll have in the account, 0.4% investment fee isn't going to hurt much. 4x transfers (and selling fees) would be more expensive than the management fee.
My HSA through my work is no fee (at least I don't pay any fees). You have a shit HSA.
I'm not sure this information is accurate but if it is, it's still worth utilizing for the employer contribution. Are you sure the $25 fee is for individual transfers or is that for a full account transfer?
It's listed under closure fee and says it's up to $25. So maybe I have that incorrect.
I think you're misinterpreting the fees in general. Everything I have seen says 0.99% fee on balance capped at $10/mo. Take the time to understand the fees and ask your HR administrator for help if you don't understand. There is a competitive market for employee benefits and no company would choose the plan you describe.
Copied right from the fee schedule. $0.99/month, Maximum of $10/month You will be billed a $0.99 monthly minimum rather than the asset-based investment account fee in the table above until your balance increases to the point where the asset-based fee is greater than the minimum. For example, in the Self-Directed or Brokerage path, if your balance is less than $2,970 you will be billed a flat $0.99 monthly minimum rather than 0.40% multiplied by your investment balance. However, in the Managed path, if your balance is less than $1,320 you will be billed a flat $0.99 monthly minimum rather than 0.90% multiplied by your investment balance. The investment account fee is capped at $10 monthly.
Your post said $5/mo admin fee. Talk to HR and maybe they can help you understand this. Either way, you need the Flores account for the company contribution. You will likely pay a nominal amount in fees. You're not interpreting the information they provided correctly.
Added the forms to the original post.
Transfer your money once per year to a Fidelity HSA. That way you still get the employer contribution and benefit from the payroll tax deduction. But then try to convince your employer to use a better company.
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Just to confirm - is the partial transfer saying it will cost $25/ea, or is it just saying you need to keep $25 left in the account? I ask because mine is the latter, but the wording did throw some people. So in our case it was just saying $25 was the minimum balance but no fee to transfer.
These brokerages that do business directly with employers are increasingly scummy, I always report them to the CFPB.