Leslie

I need to know how Health Savings Accounts work. I mean, how are they administered? I know how they "work". I know that you pay in (pre tax) to an account that you then only can use for out-of-pocket medical expenses.

I'm having a problem with my HSA (which I just started this year) and I think I'm being given bad information.

My question is ...

When the employer withholds the amount from your payroll, where does it go? Whose account does it go into and who controls the money after it's been withheld from your wages?

tom169

It's deposited to a bank or financial institution in your name.

You can usually leave it there to accrue interest or invest it.

The actual institution used depends on your employer or provider if there is some sort of incentive, or otherwise you can decide.

Leslie

When you say "provider" are you talking about the company that signed everybody up? Because it was a separate outfit from our health insurance provider.

tom169

The bank I was told to use in order to get some money match was in my brochure with all the rest of health insurance stuff.

The bank is different to my health insurance company (who process claims) and different again to the network I can use.

Sorry, I'm not sure if yours is different.

Leslie

I don't know either. Maybe there's more than one kind or it can vary from state to state?

I'm trying to figure out where my money went and why I don't have access to it. My employer refers me to the company that signed us up and that guy acts like it's not his problem.

Rete

From the Wikipedia online:

There are several ways that funds in an HSA can be withdrawn. Some HSAs include a debit card, some supply checks for account holder use, and some allow for a reimbursement process similar to medical insurance. Most HSAs have more than one possible method for withdrawal, and the methods available vary from HSA to HSA. Checks and debits do not have to be made payable to the provider.

I know my daughter withdraws hers with a debt card which was issued at the time of the first deposit into the HSA. I just got off the phone with her. The money goes from her husband's employer from his paycheck to a place called Optum Bank based in Salt Lake City.

Don't know if that helps. Has anyone else in your office signed up for the HSA? Perhaps they can tell you.

Leslie

Thanks for asking your daughter. What you and Tom have told me so far is more than I knew before.

I did ask another person in the office and, she doesn't know much more than what you folks are telling me. She's participated in the HSA for a few years and has had no problem. Basically the money disappears from her check and she spends it with the card (Mastercard) that they sent her specifically for medical expenses. Another guy told me the same thing and that you had to follow up on your purchases by sending in the hard copies of your receipts or they freeze your card. Incidentally, I only just asked them about this last week.

When I initially signed up, I didn't even know if there would be a card or what. I was waiting for a packet or something to arrive in the mail with forms and instructions. I honestly lost track of time and forgot about it for the first month or two of the year.

What has happened to me is that I never received my card. When I started directing questions of the guy who signed us up, he acted like he had never spoke with me before and said, "If you have been contributing to an HSA then we need to go ahead and get your application processed. If you haven't been contributing then you may not be eligible." He included a blank application as an attachment.

I have been contributing but I don't understand why he wouldn't know that? He ignores my phone calls and emails. I have specifically told him (via email) that I am contributing and I went ahead and filled the application out again and backdated it to the approximate date of enrollment. I emailed him a week ago asking for status and he still hasn't replied.

Mistakes that I made:

1. I took too long to complain.
2. I faxed the original application to him (the office scanner was acting up) rather than attaching it to an email.
3. I shredded the original application once he acknowledged receipt because it had my personal information on it.
4. I had him acknowledge receipt of the application on the phone, rather than in an email.

RICH

I'm no expert. Mine is also with optum bank. I have a debit card and there is a website, so I can log in and look at my money! And do investments I believe once the balance is high enough.

I work for a bank, and it used to hold the accounts for our hsa and we also had adebit carduntil a year ago changed to optum and transferred the money. I don't know why or if it is better. I hardly use it fortunately.

kodokan

We've had two, from hubby's employers. First one was administered by Bank of America, the second by Health Equity; both have worked in the same way:

- money is deducted from wages, and sent to the HSA bank account.
- we're given debut cards to spend from the account, direct to medical providers. Alternatively, we can pay medical bills using other methods - cash, credit cards checks from our regular checking account - then transfer that amount from the HSA to the checking account.
- a website log on is provided, where we can check the balance, see pending claims, history of transactions, contributions to date that year, etc.
- no receipts are required; like many tax matters, it's an honor system where the onus is on you to keep records and prove it if asked.
- the money is yours, and can be withdrawn at any time if you're willing to pay the tax penalty. It can also be rolled over without penalty to a new provider, with or without closing the original account (some people have their contributions paid into the one linked to their employer in order to save FICA as well as income tax, then do an annual rollover to a different provider which has better investment options).
- there may be a wide range of investment choices, depending on the provider. Health Equity makes us keep $1k in (low) interest bearing cash, but the remainder can be invested in one of about 40 mutual funds, including super cheap Vanguard ones.
- the bank holding the funds will issue tax documents at year end, detailing withdrawals (and maybe contributions, can't remember offhand; contributions via an employer definitely appear in a box on your W2).

kins

We had an issue with our HSA last pay period. We asked them to take $1k out of my husband's pay that period and put it in his HSA (which is an account with KeyBank, which we can access via debit card or check or online).

His playslip showed that they'd taken the $1k out. But when I checked our regular bank account, his full pay had gone in, and when I checked our HSA account with Keybank, there was no sign of the $1k.

We flagged this with the payroll person. She was confused, because she'd put in a request in the software for the money to be deducted. Upon further investigation she'd made a minor mistake in the software, so the money had not actually been deducted.

So I guess I would say...

Talk to your payroll person and ask if the money has really been deducted from your pay each period.

Ask him/her where that money is sent to. Is it an HSA bank account?

Complain to your HR person that the HSA person you are dealing with is being unhelpful. They choose these companies and should be checking that they are getting the service they have paid for.

kins

In terms of requiring receipts for healthcare expenses, my experience has been that some companies want to see receipts, and others don't. My current HSA bank does not.

Owen778

Leslie,

I signed up for the HDHP and HSA that my company has arranged this year. Previously, we were using a non-HDHP option, and we were using the FSA that goes with that, which has slightly different rules.

There are several types of HSA from several different providers. Underneath, these are usually either a bank account or a brokerage account (which allows you to hold mutual funds, and sometimes individual stocks and ETFs, as well as cash). Just like a normal bank or brokerage account, you should receive statements that tell you your balance, either electronically or by mail. Given that we're in 2017, I would normally expect there to be an online portal where you can check your balance and organise your claims etc. too.

There are two main ways to claim for payment:
1. Pay with your HSA debit card, then send in receipts within a set period of time.
2. Pay with your own funds, then use the receipts or explanation of benefits (EOB) from your health insurance provider to claim the money back. This can be direct to a bank account, as a check etc.

Money in HSAs can also be left in the account to grow, and used later in life, either for medical expenses (likely larger by then) or like a retirement account. If used for medical expenses, the money is tax-free. If used as a retirement account, the income is taxable like an IRA, but there is no penalty owed if taken above age 65. That said, while HSAs are useful, fees are often high, and administration is not always good.

Who is this individual who's been so unhelpful? Is he part of your company's HR department, is he an individual agent, or does he work for the HSA institution?

I'd also add that your company's HR department should be more on top of this, making sure that people who have been enrolled in the HSA have accounts for their money to go to. You may want to talk to whoever is working on HSAs or health benefits there.

mrken30

1)There is a one time roll over option from an IRA to an HSA.
2)There are "cafeteria" plans that means you do not pay SS taxes on HSA contributions
3)You can open your own HSA account at a credit union or bank, but you employer probably won't pay directly into that account.
4)There is a more strict requirement to keep records for tax purposes.
5)You can claim for reimbursement at any time, ie you could wait 10 years before getting reimbursed from the HSA.
6)Some HSA accounts have fees associated with them.
7)Health Equity seems to be a big player in the employer HSA accounts, they have great customer service, much better than my HR department.

I'm sure there are some points I am missing. This is what I can remember so far.

Owen778

Just wanted to add that this is true, but the restrictions involved make it a complete waste of time. Otherwise these points are all useful.

mrken30

Max of $5500 or $6500 rollover, essentially 1 year of IRA contributions.

I agree pretty much a waste of time