Shopping Around for a Health Savings Account? Examine Them Carefully
If you are considering setting up a Health Savings Account (HSA), the good news is that there are more options to choose from than ever before. But, as with any financial transaction, make sure you check out the details before you commit your money.
HSAs let you to pay for health-care expenses, like co-pays and deductibles, and save for future retiree expenses, such as Medicare premiums, on a tax-free basis. To qualify for an HSA in 2008, you need to be enrolled in an insurance plan with a deductible of at least $1,100 for individual coverage or $2,200 for a family.
It’s a fast-growing business. The number of banks, credit unions and brokerage firms offering HSAs has doubled in the past 18 months according to Carlton Doty, an analyst with technology and market research firm Forrester Research. While many HSAs are only available to people who get their insurance through their employer, she says a growing number are also being offered directly to consumers who purchase health insurance in the individual market.
If you're enrolled in a health insurance plan that qualifies you to open a tax-advantaged health savings account, it's worth shopping around. Interest rates and investment options vary widely on HSAs. And fee structures are all over the map, meaning that the amount you pay can vary widely.
If you're thinking of opening an HSA, it's important to know all the costs upfront as the fees can quickly mount up. Charges to watch out for include set-up fees, annual fees, monthly account maintenance fees, transaction fees and account closing fees.
Annual fees can range from zero to $185 per year, according to Forrester Research. The same goes for interest rates on accounts, which are typically tiered, rising as balances reach certain amounts.
Today HSA custodians are are offering investments, such as certificates of deposits, mutual funds or full brokerage services, in addition to the more plain-vanilla savings accounts.
For more information about HSAs, check out the following Web resources:
– By Ed Coury, senior editor and Midwest bureau chief for the Wall Street Journal Radio Network, Dow Jones & Co., and a reporter for WWJ Newsradio 950.
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If you are considering setting up a Health Savings Account (HSA), the good news is that there are more options to choose from than ever before. But, as with any financial transaction, make sure you check out the details before you commit your money. 
