Choosing an HSA Bank
There are many benefits to opening up a Health Savings Account. HSAs not only provide tax benefits but they also help consumers have more control over how they spend money on health care services.
But Health Savings Accounts aren’t health insurance — they’re usually bank accounts. If you have a qualified high deductible health plan, you can open an HSA with any federally approved HSA bank, credit union or other federally approved institution.
How to Find an HSA Bank
Before conducting your research about HSA providers, make sure that you already have your high deductible insurance policy in place. You must have this before you can open a Health Savings Account.
To open a Health Savings Account, you can go to most insured banks or credit unions. Chances are, if a bank offers an individual retirement account (IRA) the bank also offers a Health Savings Account (HSA), but the bank does not necessarily have to offer an HSA.
You may want to ask your insurance provider if they have any recommendations. Many health insurance companies will either offer HSAs through their own credit unions or work with a separate HSA bank.
When you purchase a HSA with a health insurance company, you may not be able to keep that savings account if you switch plans or companies. However, you can transfer the funds to another custodian.
What to Look for in a Bank
For the most portability, consider opening your Health Savings Account with a HSA bank that is independent of a health plan. That way, if you switch insurance companies, you won’t have to transfer any funds.
It is important to remember that you do not necessarily need a local HSA bank because of the popularity of online banking. It is better to pick a bank that fits your needs and meets your requirements.
Consumers should also compare what various HSA providers charge for new account set-up, monthly maintenance and transaction fees. Also, some banks require a minimum opening balance whereas others require none.
Compare the benefits, features and quality of service offered by each provider. Because each bank is different, it is important to explore all your options to find the best fit for your needs.
Opening Your Account at a Bank
You will often need proof that you have a high deductible health plan in place to show the HSA bank. Other items usually needed to open an HSA include your Social Security Number or taxpayer ID number.
Once you have set up your Health Savings Account, you will generally receive a debit card and/or a checkbook so that you may access the money from your account easily.
Also, opening a Health Savings Account with a bank will allow you to take your HSA account wherever you go, including when you switch health insurance policies or companies. This just provides a greater level of flexibility for consumers.