TipTanks

In my research, no Schwab does not offer an HSA option for what we're talking about here. There are some HSA custodians that use Schwab as the investing platform, but no clean standalone HSA accounts like what Fidelity offers.

Lots of HSA provider reviews on the inter web. Google "Best HSA" and you will see 1000 blog posts from the F.I.R.E. crowd....tops seem to be Fidelity and Lively. (The latter on account of them offering Vanguard funds as investment options.

saab2000

Bringing this back up one more time.

Yesterday I opened a Fidelity HSA. The balance is currently $0.00 but that will improve when I start to transfer funds from the Optum Bank HSA cash balance at some point soon. I won't liquidate the existing investment unless forced to do so as it's currently in a low-fee Vanguard S&P fund that's no longer available.

Thanks for the responses on this subject. The HSA seems to be a good vehicle for saving in a tax-advantaged account for later for folks who aren't large consumers of health care.

Proximity

I got a message when I tried to transfer than Optum won't transfer "in-kind" and I have to sell my positions.

I haven't had a chance to follow up further on it.

usernamehere

Pretty sure it just means you need to liquidate your positions (sell) and move it to the cash account. Then the transfer should work.

Delphin

I work at a different carrier but also just transferred my HSA funds from Optum to Fidelity. I can't promise that your rules are exactly the same as mine were, but thought this might help:

- Optum required me to keep $2,000 in cash to have any additional funds invested in anything else. I chose to transfer all but $100 to Fidelity.
- I utilized Fidelity's service to transfer the funds from Optum to Fidelity for me. It took about 3 weeks but Optum did not charge me the $20 transfer fee they say they charge.
- Optum now charges me a $1 per month fee because my account balance is below $500.

saab2000

Excellent info. Thanks much.

hoover

Does fidelity issue a CC to use your HSA funds shortly after?

TipTanks

You have to request an HSA debit card if you want one from Fidelity. I'm guessing most people who go to Fidelity are not actually using it to pay for medical expenses, so they don't issue a card by default.

hoover

so you keep money in the optimum account for such things and do a transfer once a year or so?

saab2000

This. Or just pay medical expenses out of pocket.

My plan is to keep the minimum required with Optum and transfer the rest to an investment fund with Fidelity, as frequently as possible to avoid incurring costs. My HSA will be fully funded for 2022 by late spring so I'll plan to transfer no later than at that time.

That said, if a bad situation arises, those investments can be liquidated and the funds used for qualifying medical expenses. Of course, the investment funds are not guaranteed in any way, so there is a risk involved, just like with any investment. The philosophy is that if the holder of the HSA keeps the fund active and funded for a long time it will grow and it's a great tax-advantaged way to save money as long as the saver knows the rules and restrictions of an HSA.

The primary reason to look outside Optum is that their investment options appear to have changed for 2022 and they no longer have desirable funds with low fees.