You’ve got a health plan with a high deductible, meaning you have lower monthly costs (your premium) and a higher amount you pay before your plan starts paying (your deductible) than a traditional health plan. The next step is to set up a Health Savings Account (HSA), a bank account that you can use to pay for certain health care expenses.
HSAs can be set up with banks or credit unions. You can ask your insurance company or your employer (if you get insurance through your job) for recommended places to set up your HSA. You can also start one with the bank where you have your regular checking and savings accounts.
But not all places to set up your HSA are equal. When you’re ready to shop around, here’s what to ask:
First, ask your insurance company or employer:
1. Do I have an HSA-qualified health insurance plan?
You need to have a high deductible health plan (HDHP) to get an HSA. This means that in 2020 your deductible must be at least $1,400 if you have single coverage, and at least $2,800 if you’re a family. A HDHP will not have any cost-sharing, such as copays and coinsurance, on most all benefits prior to you reaching the deductible. And, your out-of-pocket maximum cannot be more than $6,900 if you have single coverage, or $13,800 if you’re a family. You’ll know your HealthPartners plan qualifies if it includes “HSA” or “Empower HSA” in the plan name.
If you enrolled on Medicare, you are not eligible for an HSA. Additionally, if you have any other healthcare coverage, you may also not qualify for an HSA and should ask your employer or insurance company if you’re unsure.
2. Do you recommend a specific HSA trustee?
An HSA trustee is any bank, credit union or financial institution that administers Health Savings Accounts. Your employer might have an agreement with an HSA trustee, and there might be perks if you use that bank or credit union. Always make sure to ask your employer.
Then, ask the HSA trustee:
3. What are the fees?
Many HSAs have fees, just like regular bank accounts. Some charge a flat fee each month, some charge each time you use the account, and some have a combination of fees. You might also pay to open the account, transfer money or get or replace a debit card.
Ask for a list of all fees and if there are any discounts available. For example, some banks don’t charge fees if you maintain a certain amount of money in your HSA.
4. How do I put money into my HSA?
Once you open an HSA, you’ll have a few options for how to put money into it. Ask how you can deposit money from another bank account, either one time or by setting up regular, automatic deposits. If you want, your employer might arrange to take money out of your paycheck, before you pay taxes on it, and have it automatically go to your HSA.
If you get insurance through your employer, ask the employer if they contribute any money into your HSA as a benefit.
5. How do I use my HSA to pay?
Most HSAs come with a debit card or a checkbook that you can use to pay for health expenses, but not all do this.
Ask your HSA administrator what the options are for spending your HSA money, and make sure it’s easy for you.
6. How do I check my balance?
Make sure you’ll have a quick and easy way to check how much money is in your HSA and see how you’ve spent it. Most banks offer access to their account balances online, through a mobile app or by phone.
7. Will my HSA earn interest?
An HSA is just like a bank account, and the money sitting in it will grow – or earn interest – over time.
Ask your HSA administer how much interest your money will earn.
8. Can I invest the money in my HSA?
Once you have enough money saved in your HSA, some places allow you to move some of that money into a separate account to invest in mutual funds if you want to.
Ask whether investing is an option, when you can do it and what types of investments you can make.
No matter who you choose to set up your HSA with, when you’re ready, make sure you have:
- Your health insurance information - carrier name and coverage type (single or family)
- Basic information about yourself - your name, address and phone number
You're reading the "Getting Started With Your Plan" series.
Have a health plan but not sure what to do next? This series can help you get started.
Part 3: 8 questions to ask before setting up your HSA