CHOOSE THE RIGHT HSA

Once you have decided you want an HSA, your next step is to get the right plan. You’ll want one that combines the most financial benefits with the highest quality services. When looking at finances, you should consider costs (or fee structures), returns (interest rates for the accounts) and investment options.

If you or your small business invests through a stockbroker, you know how quickly administrative fees can add up. Be sure you know all the charges for managing your account, which can include account set-up fees, annual fees, maintenance fees, transaction fees and charges for closing the account. One study of 84 HSAs found that annual fees can range from zero to $185.

However, you should also keep in mind that providers with “soup to nuts” HSA products (for example, those that work together with your health plan) might have slightly higher fees. Some plans also might charge more because they offer more complex investment options such as mutual funds, bonds and money market accounts.

As with fees, regular interest-bearing accounts likewise have rates that will vary from one HSA custodian or trustee to the next (the average interest rate paid is around 2 percent). Also, many have a tiered structure for interest rates, which typically increase (usually up to around 5 percent) as the balance reaches certain levels.

On the service side, you should make certain your HSA provider understands the complex regulatory requirements associated with health insurance, because, as you know, you can’t have an HSA unless you have a high-deductible health plan. Ideally, this provider should integrate insurance plans, claims and HSA information in one comprehensive package. It’s also important for you to be able to talk in person with service personnel who are knowledgeable about HSAs and health plans. Some HSAs also will offer additional services such as online enrollment and statements, advisory services and debit cards.