The HSA Report Card

The HSA Authority

The HSA Authority

 

The HSA Authority by Old National Bank stands apart as one of the most experienced Health Savings Account administrators. They were among the first to bring HSAs to the market in 2004. Today, The HSA Authority services over 98,000 HSAs in all 50 states, with nearly $200 million in HSA assets and deposits.

 
 

Report Card

for The HSA Authority as an investment vehicle

 
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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 HSA Authority is unique in that it requires a balance of at least $1,000 in the HSA checking account in order to gain access to the investment account, but once that balance is reached, you can transfer all your money into the investment account if you wish. You are not required to leave any money in the HSA checking account.

 
 

 

Investment Account

The HSA Authority offers its participants a pre-selected investment lineup. The HSA Authority investment lineup is composed of 32 mutual funds. Below you can see the number of offerings from each fund family.

 
 

The HSA Authority Investment Lineup

The table below displays the number of funds offered for each asset class in The HSA Authority investment lineup.

 
 
Asset Class # of Funds Offered Index Fund Available?
Domestic Large Cap 9 Yes
Domestic Mid Cap 2 Yes
Domestic Small Cap 2 Yes
Foreign Developed Markets Equity 4 Yes
Emerging Markets Equity 1 Yes
Short & Intermediate Term Fixed Income 7 Yes
Target Date/Allocation 5 Yes
Specialty/Other 1 -
 
 

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 table above, you can see that The HSA Authority offers low-cost index funds for every major asset class. In fact, low-cost, broadly diversified index funds represent 40% of choices. 

How expensive are the funds in The HSA Authority investment lineup?

Per the chart below, The HSA Authority offers some of the lowest cost funds of the 7 HSA administrators in our study that offer pre-selected investment lineups.  

 
 

For The HSA Authority, the average expense ratio for each asset class is low due to the heavy emphasis on low-cost index funds. The HSA Authority has done a good job of constructing an investment lineup with low expense ratios across all the major asset classes.


Interest-Bearing Account

The HSA Authority 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.

Tier Balances APY
Tier 1 $0 - $2,499 0.01%
Tier 2 $2,500 - $4,999 0.01%
Tier 3 $5,000 - $9,000 .03%
Tier 4 $10,000 - $$25,000 .07%
Tier 5 $25,000 - $50,000+ .25%
Tier 6 $50,000+ .50%
 
 

Fees

 
Type of Fee Details
Account Transfers Free ACH/EFT
Investment $36 per year
Paper Statements $2 per month (no fee for electronic statements)
 
 

In our study of the top 10 investment HSAs, The HSA Authority ranks as one of the lowest cost administrators. The HSA Authority charges its participants a $36 investment fee. That's it! One fee! 

The HSA Authority Fee Schedule

 
 

 

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.

  • 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 The HSA Authority we made the following assumptions:

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

  • Annual Investment Fee: $36.

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

 
 

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

 
 
 
 

The HSA Authority ranks as the 5th lowest cost provider among the top 10 HSA administrators.

 
 

 
 

Features

 

In our search for the very best investment HSAs, we looked for administrators that offered a hassle-free investment experience.  The HSA Authority does not give investors all the necessary tools to easily manage their account. Our main gripe is that automated account transfers to the investment account are NOT available. Furthermore, The HSA Authority does not have a receipt storage tool. 

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

With The HSA Authority you can set up scheduled recurring deposits from your bank checking account to the HSA checking account.

Investment Sweep ☒

Transfers from the HSA account to the investment account must be manually initiated. Participants have to go into the investment platform and enter the amount of dollars they want transferred from the HSA account to the investment account.  

Dividend Reinvestment ☑

Dividends are automatically reinvested by each mutual fund.

Auto Rebalance ☒

The HSA Authority does not have an auto-rebalance feature. Investments must be manually rebalanced.

Document Storage ☒

Unfortunately, The HSA Authority does not provide "shoeboxers" with a receipt storage tool.

Intuitive Technology ☑

Participants have reported the main website and investment platform easy to navigate. However, it’s important to note that the main platform and investment platform are separate from one another, making it a disjointed experience. In order to access the investment account, one has to use a different password, making it a small inconvenience for users. 

 
 

 

Pros & Cons

Pros
  • One low fee

  • Low cost, well constructed, globally diversified investment lineup
Cons
  • Must go online or pick up the phone to transfer money into the investment account

  • Investments are not integrated into HSA account. Two separate websites.
 
 

 

The HSA Authority HSA may suit 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 don't require an online receipt storage tool

  • You don't mind picking up the phone to transfer money to the investment account

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

 
 

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