Transcript
Brian Preston (0:07)
All right, next up is basic Bedazzler's question.
Bo Hanson (0:10)
Yeah, I like that. I like yalls names when y'all, you know, take something we've shared and kind of jazz it up a little bit.
Nick (0:16)
Bedazzler would say.
Brian Preston (0:19)
He says, I'm getting a high deductible health plan at 25 work, contributes $3,000 at the start of the year. But the HSA provider has high fees, limited funds, and and about 0% in cash. Can I open a Fidelity HSA, rollover the amount and contribute there instead?
Nick (0:40)
Potentially. So we see this all the time. A lot of times with employers, there will be a specific provider that sponsors the HSA program. So if you participate in the health plan and you opt for the high deductible and you get access to the hsa, the employer says, hey, we're going to put money in your HSA and we're going to put in $3,000 if you select this plan. Some plans say, hey, you have to leave the money there. Unless you use it, you can't roll it over. Some plans are not captive like that. Some plans, once your employer puts it in, you can then roll that money to a provider like a fidelity. And if 3,000 isn't the max, you can begin contributing up to the max in that outside HSA, even if the plan doesn't let you move the 3,000 over. There's nothing wrong with having multiple HSA accounts. We have a lot of clients who do this. They'll have one, one at the company with the provider, so they get the employer money and they have another that they fund. The one caveat I would say is if you're funding it with after tax dollars, like from your checking account, you may be missing out on some payroll tax savings. Because if you fund it through your paycheck, you save not only the triple tax advantage, but get a quadruple tax advantage through the payroll savings. You have to weigh the pros and cons. Either way, what you don't want to do is you don't want to walk away from that $3,000 employer contribution. Cause that's free money.
Bo Hanson (1:59)
Yeah, without a doubt. So, you know, the only thing I'd add, I think Beau covered pretty much everything, is just go talk to your HR or your benefits people just to find out if it's a captive plan or if you actually have the opportunity for even them to contribute to different plans. I would think, though, probably because I'm the one that does payroll, still working on getting rid of that in 2025. Is that I like going to one plan because. Because it just makes administering payroll simpler. But BO gave you great advice on there's ways that you can still win on getting the free money, because that's a lot of money, and that's great that your employer does that. And don't forget, you can also advocate. Now, be polite. That's the thing. Nobody wants somebody telling them how horrible their plan is with high fees. Pour some sugar on that and try to show them there are other providers out there that are much more cost effective, have much better cash earning options, have much better investment options. You gave the example of Fidelity. Maybe compare and contrast. Show that to your employer and ask if there's some way that they can take that to the current provider to sharpen their pencils up a little bit or even consider changing who the HSA provider is for your company. Nothing wrong with being an advocate for you and your coworkers.