HealthEquity, based out of Draper, Utah, offers a complete line of integrated health care accounts. HealthEquity administers 7.5 million health savings accounts and has over $20+ billion in deposits, making it one of the largest and most experienced company’s in the industry.

Investment Threshold

The ideal investment health savings account (HSA) has no investment threshold, allowing the very first dollar you contribute to be invested. If you're using an HSA for investment purposes, seek an administrator that does not hold your dollars hostage in a checking account earning little to no interest. 

The investment threshold for HealthEquity varies from $0 - $2,500 if you are part of an employer group HSA. For individuals and families enrolling on their own, the investment threshold is now $500 (down from $2000) in order to both lower the barrier to entry for new investors and to allow existing investors to move over additional funds to the investment account.

Keeping funds in a low-interest cash account means accountholders miss out on those funds’ potential investment returns; this is known as opportunity cost. In a way this is a hidden fee because the opportunity to earn money on those dollars is lost. In HealthEquity’s case, one could argue that investor’s are missing out on $30 of earnings, assuming a 6 percent rate of return on $500 held in the yield plus account which only yields $1. The aforementioned numbers are just for one year. Stretch that out to 10, 20, or 30 years and the potential earnings lost are in the thousands. Use the calculator below to estimate the potential earnings lost on univested cash.

Investment Account

HealthEquity provides investment options to suit your individual comfort level and financial goals. Three plans to choose from.

Advisor Auto-Pilot 

Auto-pilot is a full-service option that automatically manages your investments for you. Think of it as your own personal investment chauffer. Based on your personal risk profile, Auto-pilot provides:

• Automatic quarterly re-balancing

• Mutual fund rotation

• Asset class rotation based on your personal risk profile

• Weekly performance summaries

• Alerts when there are changes in any important measures of risk and performance

• 0.05% per month

• Capped at $15/month

Advisor GPS

GPS provides portfolio guidance, giving you a suggested route to your destination. GPS gives you recommendations for fund selection and allocation based upon your personal risk profile. GPS provides:

• Recommended portfolio advice

• Recommended quarterly re-balancing

• Recommended fund & asset class rotation

• Weekly performance summary (SEC compliant)

• Monitoring & alerts (emails & texts)

• Implement advice button

• 0.05% per month

• Capped at $15 per month

Self-driven

Self-driven is for those who are confident with their own research and investment knowledge. No advice is given with self-driven investments. The member executes all fund and allocation decisions, though mutual fund research and performance data is provided. You will still have access to:

• HealthEquity’s investment funds

• Other than the monthly investment administration fee and the respective mutual fund expense ratio there are no trading costs, commissions or fund minimums.

• Quarterly mutual fund report card

• Free

HealthEquity offers all plan participants the Investor Choice fund lineup of low-cost mutual funds with a monthly investing administration fee of .03% on the average invested balance for the month, in addition to the fund operating expense. HealthEquity caps the monthly investment fee at $10 per month. Below is a breakdown of the all-Vanguard Investor Choice lineup.

Mutual Fund Breakdown

Active vs Passive

At The HSA Report Card we are big proponents of passive index investing and thus rate highly administrators that offer low-cost index funds for each of the major asset classes. In the chart above, you can see that the HealthEquity investment lineup offers low-cost index funds for every major asset class. HealthEquity has one of the strongest investment lineups among the top 10 HSA administrators.  Of note is the relatively small number of total offerings (23), which we view favorably. A lot of research has shown that offering too much choice can lead to bad decisions or even decision paralysis. 

How expensive are the funds in the HealthEquity investment lineup?

HealthEquity offers its participants some dirt cheap funds. Of the 8 HSA administrators in our study that offer pre-selected investment lineups, the HealthEquity offering is the most attractive from an expense ratio standpoint. HealthEquity offers the lowest cost funds of any HSA administrator. Expense ratios range from 0.02% to 0.15%.

When you open an HSA with HealthEquity your money will automatically be placed in their low-interest, FDIC-insured cash account. This is the default option when opening an HSA. 

Yield Plus is an alternative way to hold funds in your health savings account (HSA). It is not FDIC-insured, but has the potential for higher interest than the FDIC-insured cash balance. If you elect to have your HSA cash balance placed in a non-FDIC insured option, such as Yield Plus, the rates above do not apply to that portion of your HSA cash balance.

Condensed Schedule of Fees (Non-Employer Group)

HealthEquity no longer be charges a maintenance fee. In our study of the top 10 investment HSAs, HealthEquity ranks as one of the most expensive administrators. HealthEquity charges the highest custodial fee (0.03% per month) out of the 10 administrators in our study.

Projected Fees

In this section, we have a little fun projecting fees for each administrator. Our goal was to find the path to the lowest possible fees for each administrator. Keep in mind, we are assuming the HSA is being used solely for investment purposes, therefore only certain fees will apply. Given that every HSA is different, there is no perfect way to compare the top 10 administrators in our study. Nonetheless, we gave it a shot and believe there is value in presenting our findings.

In order to compare fees, we made a few simple assumptions:

• Every dollar above the investment threshold was invested.

• Current and future contributions were invested in a single fund.

  • Total Stock Market Index (VTI / VTSAX / SPTM/ FZROX) or S&P 500 index (IVV / VIIIX / VFIAX). We believe these two index funds are one and the same.

• No transaction fee (NTF) or commission-free ETF programs were utilized to buy the index funds.

• If these index funds were not available under the NTF and/or commission-free ETF programs, we turned to the open market and executed a single trade per calendar year in order to keep transaction costs down.

For HealthEquity we made the following assumptions:

1. Self driven plan (free)

2. Every dollar is invested in VIIIX (expense ratio 0.02%)

3. Investor Choice fee: 0.36% per year on invested assets

The chart below summarizes the projected fees on different investment balances for HealthEquity.

The following chart illustrates where HealthEquity stands in terms of fees when compared to the other top investment HSA administrators. 

On investment balances from $0 - $15,000, HealthEquity fees are reasonable and in line with those of other top administrators. However, once investment balances reach the $20,000 mark and beyond, HealthEquity’s fees are substantially higher than other top HSA administrators. For this reason, HealthEquity earned a poor grade on this measure.

In our search for the very best investment HSAs, we looked for administrators that offered a hassle-free investment experience. The HealthEquity HSA is definitely a feature-rich offering in that it gives investors all the necessary tools to easily manage their investment account.

Personal Finance App Integrations

In this modern age of personal finance consumers want the ability to bring together information from multiple accounts and institutions in order to get a 360-degree of their finances and make better spending and saving decisions. The two best personal finance data aggragators are Personal Capital and Mint. HealthEquity’s HSA integrates nicely with both.

A HealthEquity HSA may be right for you if:

• You seek a feature rich HSA and don't mind paying the associated fees

• You love the all Vanguard investment lineup

• You desire an online receipt storage tool

• You have less than $15,000 in the investment account

• You are also planning on spending some of those HSA dollars. HealthEquity is on our short list of the best HSAs for spenders.

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