The HSA Report Card

Health Savings Administrators

HealthSavings Administrators

 
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HealthSavings Administrators has been in the healthcare savings and investment world since medical savings accounts (MSAs) were first introduced in 1997. After the legislation enacting HSAs passed in January 2004, they shifted their focus to HSAs – emphasizing, even then, the vital role that HSAs play as part of a comprehensive retirement strategy. HealthSavings Administrators calls itself the "investors HSA". They offer first dollar investing, which allows participants to invest right away, no minimum balance required. The company manages nearly $900 million in investments with clients in all 50 states, including employer groups, brokers, financial advisors, and individual investors.

 
 

Report Card for HealthSavings Administrators

as an Investment Vehicle

 

Threshold

A

Investments

A

Fees

C

Features

B

Overall

B

 
 

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. 

HealthSavings has no investment threshold requirement. HealthSavings is one of five administrators in our study that allows first dollar investing.

 
 

 
 

Investment Account

HealthSavings offers 42 high-quality investment options from Vanguard and Dimensional Funds, two of the best fund families in the mutual fund industry. Highlights of the HealthSavings pre-selected investment lineup include:

  • Carefully curated lineup that covers all core asset classes

  • A robust selection of low-cost, institutional-class funds

  • 50/50 balance between active and passive funds

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In the chart below you can see a breakdown, by asset class, of the wide array of investment options made available by HealthSavings. The smaller the square, the lower the expense ratio.

 
 

At the The HSA Report Card we are big proponents of passive index investing. We like to see investment lineups with at least one index fund for each of the core asset classes. In the chart above, you can see that HealthSavings offers low-cost index funds for every major asset class, save an emerging markets fund.

How expensive are the funds in the HealthSavings investment lineup?

HealthSavings offers participants very inexpensive funds. Of the 8 HSA administrators in our study with pre-selected investment lineups, HealthSavings offers the second lowest cost funds. The average expense ratio across every asset class is less than 0.30%. 

 
 

Interest-Bearing Account

HealthSavings offers participants an FDIC-insured, interest-bearing account. Interest bearing accounts make sense for participants who are uneasy about investing their HSA dollars in the equity markets. Interest is credited monthly and based on the balance in your cash/debit card account. The interest rate available on different balances is as follows.

Highcharts Tutorial  

 

Fees

 

Condensed Schedule of Fees

Type Fee
Administrative $45 per year
Custodial 0.25% per year
 
 

In our study of the top 10 investment HSAs, HealthSavings ranks as one of the most expensive administrators. HealthSavings charges its participants a fixed fee in addition to a custodial fee. 

Complete Fee Schedule

 
 

Projected Fees

In this section, we have a little fun projecting fees for each administrator. Our goal was to keep fees as low as possible 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 offering 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.

  • 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 HealthSavings we made the following assumptions:

  1. Every dollar was invested in VTSAX (expense ratio 0.04%)

  2. Annual Administrative Fee: $45

  3. Annual Custodial Fee: 0.25%

The chart below summarizes the projected fees HealthSavings participants would incur for different investment balances.

 
 

The following chart illustrates where HealthSavings Administrators stands in terms of fees compared to the other top 10 investment HSA administrators. 

 
 
 
 

HealthSavings Administrators fees are on the high side, thus the poor grade on this measure. HealthSavings Administrators ranked as the 9th lowest cost provider in our study of the top 10 investment HSAs.



 

Features

 

In our search for the very best investment HSAs, we looked for administrators that offered a hassle-free investment experience. We believe HealthSavings Administrators gives investors the necessary tools to easily manage their account. The website is easy to navigate and automated account transfers are available. A receipt storage tool would make the HealthSavings Administrators offering even more attractive though. 

Feature
Auto Deposit
Investment Sweep
Auto Rebalance
Dividend Reinvestment
Receipt Storage Tool
Intuitive Technology
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Auto Deposit

With HealthSavings you can set up scheduled recurring deposits from a bank checking account to the HSA checking account.

Investment Sweep

The nice thing about HealthSavings is that the money from your personal checking account automatically flows right into your investment account and is allocated per the elections you set up.

Dividend Reinvestment

Dividends are automatically reinvested by each Vanguard mutual fund in the investment account.

Auto Rebalance

Investments cannot be automatically rebalanced, manual rebalancing is required.

Receipt Storage

Not available. You’re responsible for keeping receipts for all distributions from your HSA.

Intuitive Technology

HealthSavings completely revamped the member portal to deliver a more streamlined and user friendly experience. Only requires one password to access and manage all accounts. You can view account and investment balances as well as graphs and reports to monitor contribution limits.

 

Personal Finance App Integrations

Personal Capital HealthSavings integrates with this budgeting, investing, and finance app.
Mint HealthSavings is not integrated with this budget centered platform.
 
 

Pros & Cons

 
 
Pros
  • First dollar investing

  • Quality investment options from Vanguard and Dimensional Funds

  • Entire investment process can be automated
Cons
  • Custodial fee 0.25% per year. Fees rise as investment balances grow

  • No online receipt storage tool

  • Maintenance fee is on the high side

A HealthSavings HSA may be right for you if:

  • You are satisfied with the investment options in the pre-selected lineup

  • You are planning on making multiple transactions per calendar year

  • You desire first dollar investing

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


Compare Top Investment HSA Administrators


 
 

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