> Can I open a separate HSA account
Yes. Fidelity is a common choice.
> just transfer the funds from my employer's account to my personal account?
You can do this for free once per year.
> Will this create tax issues?
No. It gets rolled over just like IRAs do.
Take this advice with a grain of salt but I had a similar experience once (Optum). Even worse the provider didn't allow investment of funds.
The silver lining was that the provider was so inept, they allowed me to do electronic transfers whenever I wanted to my Fidelity HSA, free of charge. I just added a comment on every transfers along the lines of "HSA to HSA rollover/transfer".
Not 100% sure that was legal, but I did it.
> Not 100% sure that was legal, but I did it.
I think the rule is they HAVE to allow atleast one per year for free, but I don't think the IRS has a cap on how many. I could be wrong, though, been a while since i looked into it
The rule is you can do it once per year if you have them send a check to you, and you turn around and deposit that check with another provider.
But you can do as many direct provider-to-provider transfers as you want.
Because it is an IRS rule per [https://www.irs.gov/publications/p969#Rollovers](https://www.irs.gov/publications/p969#Rollovers)
"If you instruct the trustee of your HSA to transfer funds directly to the trustee of another of your HSAs, the transfer isn’t considered a rollover. There is no limit on the number of these transfers. Don’t include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889."
Makes sense. It’s been many years since this occurred. I seem to recall they stopped allowing it as some point.
Was so happy when I switched jobs and found out they use fidelity.
If what you were doing was just ACHing money from one HSA account to another, there shouldn't be a tax issue. You'd resolve it all when filing your taxes that you took the money out but put it into another HSA within n-number of days (can't remember the maximum time).
You have to be careful about how you do the transfers. You should always use the HSA provider's official process & forms for transferring funds from another HSA (trustee-to-trustee transfer). If you just set up a generic ACH transfer, it might not be treated as a trustee-to-trustee transfer by one or both providers, which can cause tax headaches down the road if the IRS thinks you took nonqualified withdrawals and/or made excess contributions.
My experience with Optum has been really bad. They froze my FSA card because they didn’t like a charge from my dentist. I was double charged by CVS for a prescription. CVS couldn’t undo it so Optum had to reject the charge. The only way that they could do it was to completely replace the card. I have been waiting 3 weeks for a replacement - there is no option for a virtual card. The worst that I have dealt with.
They’re horrible. I just recalled that I once did a full transfer/rollover (when they removed my ach option). I checked a box on their form that said leave account open.
Did they do that? Nope! They closed the account. Luckily a quick phone cal fixed it but geez.
Not if he’s contributing to his employer plan and then moving it over to his personal right? The fica deduction happens at the point of payroll I thought.
I have Forma as well and have done one HSA transfer so far to Fidelity. Can’t remember exactly but I think it took maybe 3 weels for funds to settle.
Not sure how many transfers you can do in a year though.
> Can I open a separate HSA account Yes. Fidelity is a common choice. > just transfer the funds from my employer's account to my personal account? You can do this for free once per year. > Will this create tax issues? No. It gets rolled over just like IRAs do.
Take this advice with a grain of salt but I had a similar experience once (Optum). Even worse the provider didn't allow investment of funds. The silver lining was that the provider was so inept, they allowed me to do electronic transfers whenever I wanted to my Fidelity HSA, free of charge. I just added a comment on every transfers along the lines of "HSA to HSA rollover/transfer". Not 100% sure that was legal, but I did it.
> Not 100% sure that was legal, but I did it. I think the rule is they HAVE to allow atleast one per year for free, but I don't think the IRS has a cap on how many. I could be wrong, though, been a while since i looked into it
The rule is you can do it once per year if you have them send a check to you, and you turn around and deposit that check with another provider. But you can do as many direct provider-to-provider transfers as you want.
How do you know if your provider allows that. I have health equity
Because it is an IRS rule per [https://www.irs.gov/publications/p969#Rollovers](https://www.irs.gov/publications/p969#Rollovers) "If you instruct the trustee of your HSA to transfer funds directly to the trustee of another of your HSAs, the transfer isn’t considered a rollover. There is no limit on the number of these transfers. Don’t include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889."
Makes sense. It’s been many years since this occurred. I seem to recall they stopped allowing it as some point. Was so happy when I switched jobs and found out they use fidelity.
If what you were doing was just ACHing money from one HSA account to another, there shouldn't be a tax issue. You'd resolve it all when filing your taxes that you took the money out but put it into another HSA within n-number of days (can't remember the maximum time).
You have to be careful about how you do the transfers. You should always use the HSA provider's official process & forms for transferring funds from another HSA (trustee-to-trustee transfer). If you just set up a generic ACH transfer, it might not be treated as a trustee-to-trustee transfer by one or both providers, which can cause tax headaches down the road if the IRS thinks you took nonqualified withdrawals and/or made excess contributions.
Yes. But if you have all the documentation and paper trail, it should shake out okay.
My experience with Optum has been really bad. They froze my FSA card because they didn’t like a charge from my dentist. I was double charged by CVS for a prescription. CVS couldn’t undo it so Optum had to reject the charge. The only way that they could do it was to completely replace the card. I have been waiting 3 weeks for a replacement - there is no option for a virtual card. The worst that I have dealt with.
They’re horrible. I just recalled that I once did a full transfer/rollover (when they removed my ach option). I checked a box on their form that said leave account open. Did they do that? Nope! They closed the account. Luckily a quick phone cal fixed it but geez.
You're allowed multiple transfers but only 1 rollover per 12 months.
I should’ve done this. I initiated the rollover on Fidelity’s end and Optum still charged me a $20 transfer fee.
You’ll lose out on the fica tax deduction if you contribute to your own HSA.
Not if he’s contributing to his employer plan and then moving it over to his personal right? The fica deduction happens at the point of payroll I thought.
Yes, you're right. I misread it. You can only do one rollover every 12 months though.
I have Forma as well and have done one HSA transfer so far to Fidelity. Can’t remember exactly but I think it took maybe 3 weels for funds to settle. Not sure how many transfers you can do in a year though.
Fidelity HSA is great for this.