How to know if your health savings account is subpar

"HSAs are a triple tax-advantaged vehicle in the tax code, allowing for pretax contributions, tax-free compounding, and tax-free withdrawals for qualified medical expenses. However, few owners fund their HSAs to the maximum, and even fewer invest their HSA dollars outside a savings account. Most consumers likely don't fill their HSAs because they lack the financial means; critics note that the HDHP/HSA combination can be less beneficial for lower-income workers."

"Yet HSA expenses and/or investment shortcomings can erode their tax benefits, particularly for smaller HSA investors. Flat dollar-based account-maintenance fees (say, $45/year) hit smaller HSA investors harder, and interest rates for smaller HSAs may be lower. It's worthwhile to conduct due diligence on your HSA, assessing the following: 1. Setup Fees: A one-time fee imposed at account opening, sometimes covered by employers. 2. Account-Maintenance Fees: Monthly or annual fees for maintaining your account, also sometimes covered by employers."

Health savings accounts paired with high-deductible plans ease healthcare costs and provide triple tax advantages: pretax contributions, tax-free compounding, and tax-free withdrawals for qualified medical expenses. Few account owners maximize contributions and even fewer invest HSA balances beyond a basic savings option. Lower-income workers may derive less benefit from the HDHP/HSA combination, while some higher-income consumers still avoid full funding because of account fees and investment costs. Flat maintenance fees and lower interest rates hit smaller HSA balances hardest. HSA funds are portable via transfers or rollovers, so account due diligence on setup, maintenance, and investment fees is important.

Read at Fast Company