This is because you are not the customer. Your employer is the customer, they are the ones who get to choose the HSA provider for their employees. You are the goods to be sold. The HSA provider is simply harvesting profits.
Thanks, I hate it
“You are not the customer, you are the product” is true so often, but in many cases (like this one) it doesn’t really apply.
First off, “not the customer but the product” is an inherently antagonistic relationship. Your goals are opposed to Facebook’s, for instance, because you want to spend less time on the platform and you want to interact with friends and not brands, but Facebook wants the opposite of both. But with HSA administration, your goals and your employer’s goals are aligned: you both want someone who will quickly and painlessly manage your account without being a pain.
Second, “not the customer but the product” implies an undisclosed, extractive payment occurring behind the scenes. TikTok is harvesting a great deal of data from you and selling it to other companies. You are the product in that your data has value. But with HSA administration, the product is just the management of your HSA money; there’s no under-the-table dealing going on here (or there shouldn’t be); they’re getting paid by your company for their services.
Third, “not the customer but the product” relationships are entirely one-way; you have no way to impact the providing company beyond just not using their services. They do not, will not, and at some level can never care about your experience beyond making it as minimally useful to you to keep you on the platform. But that HSA provider desperately needs your company’s business, so if enough of your coworkers raise a stink and get your company to complain, they will make a change.
In actuality, “not the customer but the product” ignores the unfortunate reality of most HR/payroll service companies in this case: they’re just the lowest bidder, contracted at the bottom dollar to provide the cheapest services possible, because your employers don’t have to use their services and don’t care about your experience.
fee fee fee fee fee fee
HSAs are a misdirect to get you to ignore how shitty high deductible plans are. Never take the high deductible plan.
I save money with the HSA/high deductible. I always plan around using 100% of deductible. Premium plus HSA contribution is less than the PPO option.
I’ll never pick an 80/20 plan. They generally charge more and cover less.
And I’m an old hag and have recently got cataract surgery in both eyes, hearing aids, etc.
HSAs are also a way to get healthy people away from wanting universal health care by catering to their self interest, just like how IRAs were intended to let people with money invest in retirement which eroded support for social security.
It really depends. My company, you always do the high deductible. The OOP Max is only $5k compared to $13k for the other. The difference in premiums plus my employers contribution to the HSA are more than the difference between the two deductibles. The plans cover the same stuff. I don’t really get why they’re set up how they are.
My company offers something similar, but I worry it’s a short term incentive to get more people onto HDPs and then quietly make that the only option.
It depends though. If you are relatively healthy with no chronic issues (yet) and have enough saved for an emergency, it can save you a good amount of tax-free money that you can use for when you get older and sicker. That and the monthly premium is much lower than a PPO. Obviously universal healthcare is still the best option.
My company has high deductible plan with $1800 deductible and another with $3600 deductible. I just divide those by 12 and add to monthly premium when comparing against HMO/PPO plans.
I’m single and old.
Is your company paying part of the deductible? I can’t get an HSA-qualifying plan with deductible under $6000. Also single and old.
Generally the lower the deductible, someone is paying more upfront. How that is split between employer and employee is unknown to me. My last two jobs have had similar high deductible plans.
it’s always fine until it’s not
Yes, but until then you are parking money that you can actually use to pay for medical bills, unlike a PPO where you pay hundreds of dollars a month just to the insurance company then still need to pay a deductible anyway. Sure, a PPO deductible is lower than an HSA, and your bills should theoretically be lower as well; that’s why I said if you don’t have chronic issues or you don’t get sick often, you might be better off with an HSA. You can always switch to a PPO when the chronic issues start.
For example. In my first year at my job, I chose PPO. I was paying $400 a month. The only medical stuff I did for the year was visit a specialist twice at $35 a visit. Even if I was on an HSA and paid full price for the doctor visits, it would still be cheaper than the $4800 I paid on my PPO for the year. If I was on an HSA back then, I would’ve paid only $50 a month. If I had the same budget, then I could’ve put the rest of the $350 into an HSA tax free, and I can actually use it to pay medical bills. Also, my employer puts in $1000 for free into my HSA, so that’s an automatic $1000 less on my deductible.
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I left two cents in mine and just left it as is. I like to think that every time those pirates send me a letter telling me I have 2 cents left or send me checks which I don’t cash it costs them money.
At the very least, the USPS is getting money out of them. More than the 2¢, even.
It does cost them money, more than you have in the account.
Reminds me of when my ISP who was “no contract” had a cancellation fee. Like I have to pay money to stop being billed? Something about that feels very backwards.
Not to mention illegal.
Yep,
I don’t consent to that charge.
Oh, it’s one of our rules.
Too bad so sad, no contract.
This is not mildly infuriating. This should just be illegal. Paying money to close your account is beyond infuriating
CFPB is aware of the issue. I’m guessing that the incoming administration is not going to care about fees.
And thank GOD! if a Business wants to Steal ALL my Money that just makes them GOOD BUSINESSMEN! If I wanted Rights I would Lift up my Bootstraps!
It’ll trickle down
No no see the problem is that you have money, and you need to give them that money otherwise they can’t get more money
Stealing is smart
The admin fee is $0. Can you just transfer all of the money out and keep the account empty?
I had this happen a couple jobs ago - I successfully spent it down to $1, but the they wouldn’t transfer that little. I suppose I may still legally have this amount somewhere
You can always just transfer it yourself. Withdraw it from a physical location (assuming there is one) for that bank and deposit it in your own hsa account.
This is exactly what I do. Spend all the money out of the account and delete my login. Done this at least a couple times and I’ve never had an issue. What are they gunna do? File a bullshit claim on my credit?
Honest question: why? I’ve only been able to use an HSA once, and I thought the big advantage is that it’s your money you can keep and use whenever. Can’t you just keep using it normally, ideally save some of it?
In my case, my ex got it put in our divorce judgement that I would carry “traditional” insurance, so I knew that my HSA had no future
Well, I spent the money using the American healthcare system. Because my insurance sucks so much that I often get shafted with huge bills. One such recent one was learning I had to get hearing aids out of pocket as my plan had no coverage. That is why my HSA is gone.
That’s unfortunate: it definitely sucks both that hearing aids are inordinately expensive and that they’re not usually covered. I assumed from reading your post that it was more intentionally spending down and abandoning the account
You can’t contribute to the HSA but can spend it on qualified medical expenses or sit on it until age 59.5 and draw it down or use it to pay Medicare premiums starting at 65.
HSAs are an annoying attempt to fix US health insurance. They are tax free (meaning your money goes farther), but you can only contribute to them if you have a high deductible health insurance plan.
Additionally, you are limited to a couple thousand a year in contributions and that money can only be used for approved health expenses. The slight upside is that the money won’t ever go away, meaning you can keep building up your HSA and even invest it.
Where it’s gotten weird is that many people actually just use it as tax deffered savings, as after 65 (I think) the money becomes general use.
However, this means HSAs primarily benefit wealthier people by only really being accessible to those who already have insurance and have excess money to contribute.
Hey, Jackal, is the Kuzko’s poison?
That is Kuzko’s poison indeed.
The poison. The poison for Kuzco, the poison chosen especially to kill Kuzco, Kuzco’s poison. That poison?
Take it, Kronk! Oh, feel the power.
Is that my voice? Is that my voice??
Does it benefit the company in some way to have empty accounts on their books?
It’s that someone has to do work and they want things to be automated. Everything with a fee is to cover salaries.
That’s a funny way to spell executive bonuses.
What I mean is that if a human has to interact with you, you have to pay for that time. That, at least, would be the justification.
As somebody who works in designing software systems, including for large companies, lets just say that the amount of human time that goes into a customer account closure is negligible because main business operations such as openning and closing customer accounts are the ones that get automated the soonest and the furthest.
The stuff that uses “lots” (in relative terms) of manpower is supporting customers with really unusual problems involving third parties and even then spending 2.5 h man/hours (assuming the administrative person get paid $10/per hour) is pretty uncommon.
You’ve been lied to, repeatadly, for at least 3 decades.
I’m not saying that I accept their word, which I am apparently failing at conveying. I am a technology director myself and agree that it’s not any effort. I’m just saying that they will lie and charge you money.
Ah, right - I misunderstood that point you were making.
So, as it turns out, we’ve been in agreement all along.
$10/hr for customer support? Any random fast food joint will pay you more if you have a pulse. Maybe if you offshore it…
Not living in the US, I’m not up to date with US salaries.
That said, even for administrative personnel paid $25/h, $25 will pay 1h of somebody’s work which is way beyond what is needed to close a retail customer account in any modern administrative system were such thing is a common operation which should take less than a minute to do, because people who design the kind of company administrative computer systems (such as yours truly, at least during part of my career) will make the most common business operations be the fastest to do in that system.
You don’t get it. It’s a health savings account.
They charitably contribute a whopping 0.05% APY to an account that drains to zero every year.
That’s FSAs.
HSA funds continue growing so long as you aren’t using them. If you’re healthy and actually middle class or better they act as a 3rd retirement vehicle, since after 65 you can use it for whatever and they don’t penalize you.
My HSA interest rate is actually 0.01%
Are you not allowed to invest it? My HSA is invested in an ETF…
Of course, it’s not a massive menu of investment options but it has all the basics like SP500, target date funds, bond funds, dividend funds, etc. The cash portion, and it is literally called a savings account, is really bad rate, this 0.05% rate is really good compared to mine 😂. For my plan you have to keep at least $1000 in the savings account before you can invest.
You are correct that if it drains to zero every year that is an FSA for sure
Yeah, well don’t keep it in that part lol.
I switched off of the family HSA plan after two years of paying out of pocket at the end of the term. It depends on the customer.
Regardless, the interest rates are abysmal.
But now you’re paying your bills with post tax dollars instead of pretax.
Yes, but most HSAs let you invest in index funds so it becomes like another IRA.
Exactly this, they’re best used as a tax free investment account rather than anything health related. If you’re on a plan with high enough a deductable to be eligible for an HSA and can afford it you should max out your HSA contributions before even a penny of unmatched 401k contributions. Personally I’d argue that you’re better off maxing out the HSA and using post-tax money to pay medical expenses unless close to the end of your career. It’s one of it not the single most easily taken advantage of ways to not pay tax at all on a long term investment.
The system is indeed stupid but the least you can do is take advantage of it where possible and for the middle class the HSA is one of the best ways.
Why is it better than unmatched 401k?
401k money is taxable as regular income on withdrawal. The expectation is you will be in a lower tax bracket after retiring, so you win.
HSA is not taxable, although I don’t know if that’s just when used for medical expenses
After 65 they don’t audit what you withdraw for.
Once you hit 65, you can withdraw HSA funds for any purpose, tax free, like a Roth IRA. 401k withdrawals will be taxed as ordinary income, so an HSA dollar is worth about $1.20 in a 401k.
You know, I can look up the definitions of HSA and FSA and things like that, and I can have the definitions right there in a document on my screen, but they still don’t make any sense to me in terms of how they relate to me specifically. A lot of times they seem like they depend on me predicting things in the future that are unknowable, like my future health or how and where I will be billed for something. And that’s assuming I also look up related terms like APY and deductible and figure out what those mean. If I ask any HR people they’re like “just contact the provider for an explanation” and I’m like yeah, I totally want to deal with the phone menus and hold times of some faceless corporation, just to have them pull some BS like OP’s talking about.
Sorry about the rant. I guess that’s what I find mildly infuriating.
The main difference is FSA is use it or lose it. I got Lasik many years ago because I had 1 month to use $2000 in my FSA.
HSA is like a 401k that you can deduct from immediately for medical needs.
To simplify both posts below:
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FSA: good if you know you’re going to have $2-3k+ medical expenses and want to use tax deffered money.
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HSA: good if you want to save tax deffered money year over year (and don’t mind having a high deductible insurance plan)
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additionally, some people use HSAs as an investment for retirement.
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FSAs do depend on you kinda predicting or hedging bets against your own health since they only last the year. You can also use them to buy certain health/exercise equipment though.
HSAs can often be invested (in stock market) thus act like an IRA with extra tax avoidance if you manage not to use it for long enough. It’s counter to the stated purpose but it’s basically better to not withdraw or reimburse from it unless you need to.
Deductibles are Deductibles. How much you have to pay before insurance “kicks in”. There are per visit deductibles and yearly deductibles which are as they sound. HSAs are only available to plans with high deductibles. FSAs are available to plans that aren’t just high deductible.
You’re thinking of an FSA.
That schedule of fees looks like it’s straight from the 1980’s.
It deceives people whose idea of how things work in large companies hasn’t changed since the days when it was the manager of your bank branch who decided if you you should get a loan or not.
Nowadays, for certain in middle and large size companies, all the administrative main business pathways are heavilly if not totally automated and it’s customer support that ends up eating the most manpower (which is why there has been so much of a push for automated phone and chat support systems, of late using AI).
Those $25 bucks for “account closure” pays at worst for a few minutes of somebody’s seeking the account from user information on a computer, cross checking that the user information matches and then clicking a button that says “Close accout” and then “Ok” on the confirmation box and the remaining 99% or so left after paying for that cost are pure profit.
eyup. had this twice. so annoying that jobs don’t let you choose an hsa for it to be deposited into.
When I was looking for a non-employer HSA, there’s a lot of providers out there with not-exactly-predatory terms. All kind of fees or restrictions that you wouldn’t find on other types of checking/saving/brokerage accounts. I ended up a Lively, but they added some investment/transfer fees when Schwab bought Lively’s investment partner TDA.
I suspect it’s partly because most HSA are determined by the employer, so someone in HR can be induced to choose a fee-laden plan if it’s easier for them, and partly because the tax benefits are so great that it still makes sense even after paying a $20 junk fee here and there.
The fact that you get charged for a paper statement and that is not an opt in is more infuriating.
No lollygagging!
Drain it to zero and then let them auto close it for inactivity. Or keep it open forever since there’s no admin fee.
I’ve had one open for years that is empty. I think they’re hoping I eventually put money in it so they can drain it for the years it sat unused.
It’s an HSA, keep as much as you can in it. Use it for medical if you have too. Let it become functionally an IRA when you hit 65.
Cause everything is stupid and you can’t choose your own HSA, I had multiple at one point. It’s easier to merge them all and close the rest so you aren’t keeping track of a ton of accounts.
Edit: Also if your investing there are better or worse accounts, so moving all the money into one can help make you more money.
