Where and How to Open a Health Savings Account

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:

HSA Administrators

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:

Tax Year

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?

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About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon.

He created Part-Time Money® back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence.


    Speak Your Mind


  1. Like Philip I went with a local Credit Union. They do have a small monthly charge, but having it local has been nice. Other people I know use HSABank and Alliant Credit Union has had good rates on HSA accounts in the past.

    cd :O)

  2. I have my HSA through Chase because it was convenient for me even with the $2.50 monthly fee. My company did not offer funding of the HSA so I had to find my own carrier and since I have Chase cards and a checking account I wanted the easy access of that. I just started the HSA so my balance is low but it looks like the best bet would be for me to stay with Chase for now and then move to the second one in the image as they waive the monthly fee AND offer a higher rate of interest.

  3. Philip Taylor says

    Good point that you bring up, Jenna. Another good post idea: new changes for 2011 with FSAs and HSAs due to the new healthcare law.

  4. I didn’t get an HSA, because I don’t have a co-pay through health care provider and HSA won’t cover non-prescriptions next year. Since I don’t have many perscriptions I didn’t think it was necessary.

  5. Philip Taylor says

    I’m usually not a fan of using non-retirement accounts for retirement purposes (or vice versa), but it’s worth a look.

  6. I think it would make for a great follow-up post. My financial planner friends tell me they often recommend this strategy to clients, but I don’t think very many people would think of it otherwise.

  7. Philip Taylor says

    Good point, Matt. I guess I need to do some investigating into using it as an extra retirement account. Would make for a good follow-up to this post.

  8. We have our HSA at First American Bank in the Chicago area. For their basic account, there is no minimum balance requirement and there are no fees. For their HSA Plus account, which offers more investment choices, there’s a $4/month fee. Since we tend to use all the money we put into the account every year, we’re happy with the no-fee basic account. For those who treat their HSA as added retirement savings, it may be worth it to go with the Plus account.