Where and How to Open a Health Savings Account

Have you been wondering about a health savings account?

I struggled with this question myself recently.

We are currently on a high-deductible, individual health insurance plan with BlueCross BlueShield.

I actually started with this plan back in May when my group insurance ran out.

Since that time I have been meaning to fund a health savings account so that I could save tax dollars on out-of-pocket money used towards health care costs.

As I’ve previously mentioned, your heath insurance plan needs to be HSA-eligible for you to be able to do this. Then comes the question of where and how to actually open the HSA. This isn’t very apparent throughout the health insurance process.

Where to Open a Health Savings Account

I did some digging around on the eHealthInsurance.com website and discovered that they have some suggested HSA Administrators. Here’s a snapshot:

What stuck out to me on that page was the monthly fees associated with the accounts for smaller balances. No thanks! I then did some calling around with local credit unions and found one that offered the HSA free of monthly fees.

Note that if an HSA pays an interest rate, it might makes sense to pay a monthly fee. For those who like to keep high-balances in their HSAs, this might make sense. We’re just getting started with our health savings account, so I’m sticking with a no-fee account.

Where to Open a Health Savings Account

The sign up process was fairly straight-forward. I went down to the credit union branch with my ID and a check for $1,000 as an initial deposit into the account. This wasn’t a required minimum or anything. It’s just what I chose to initially fund the account with. I don’t think the account had a minimum actually.

They then gave me some forms for future contributions and sent me on my way. A few days later I received a debit card to use towards out-of-pocket expenses.

The great thing about the HSA is that, unlike a flexible spending account, the contributions do not have to be used within the year.

Here are the annual HSA contribution limits:

Note that if this is your first year to have a HSA, contribution are further limited by the number of months you’ve been on an eligible plan. Read more about HSA contribution limits.

Have you funded an HSA? Where did you open it?