Setting Up Your HSA | |||
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What do I have to do to “establish” my account? Who can help me establish my account? My bank/credit union doesn’t offer HSAs, can I be my own trustee or custodian? I can’t find a bank or credit union to open my account, what can I do? What is the difference between an HSA “custodian” and an HSA “trustee”? Can couples establish a “joint” account and both make contributions to the account, including “catch–up” contributions? Must couples open separate accounts? How soon can I open my account? I want to make sure my HSA is “established” as soon as possible. Can I establish my account before my HDHP coverage begins? | ||
What do I have to do to “establish” my account? Your account trustee/custodian will determine what you need to do, which may include completing and processing appropriate paperwork, and making a minimum deposit. Who can help me establish my account? Insured banks and credit unions are automatically qualified to handle HSAs. Any bank, credit union or any other entity that currently meets the IRS standards for being a trustee or custodian for an IRA or Archer Medical Savings Account (MSA) can be an HSA trustee or custodian. The law also allows insurance companies to be HSA trustees or custodians. My bank/credit union doesn’t offer HSAs, can I be my own trustee or custodian? No, you must establish your HSA with an approved institution. I can’t find a bank or credit union to open my account, what can I do? Unfortunately, we cannot maintain a list of banks, credit unions or other institutions offering HSAs. We recommend checking websites like www.hsainsider.com for companies who are willing to establish your account regardless of where you live. What is the difference between an HSA “custodian” and an HSA “trustee”? The differences between a “custodian” and a “trustee” are minor. A trust is a legal entity under which assets are actually owned and held on behalf of a beneficiary. The trustee has some level of discretionary fiduciary authority over the assets of the fund. The trustee must exercise that authority in the best interests of the beneficiary. A custodial arrangement, on the other hand, is like a trust, but the custodian simply holds the assets on behalf of the owner of the assets. Other than holding the assets and doing as the owner orders, the custodian has no fiduciary obligations to the owner. The determination of what constitutes a trust or custodial arrangement is a determination made under state law. Can couples establish a “joint” account and both make contributions to the account, including “catch–up” contributions? “Joint” HSA accounts are not permitted. Each spouse should consider establishing an account in their own name. This allows you to both make catch–up contributions when each spouse is 55 or older. Must couples open separate accounts? If both husband and wife are eligible to contribute to an HSA, they are both eligible to establish separate HSAs. However, if both spouses want to make “catch–up” contributions when they are age 55+, they must establish separate accounts. How soon can I open my account? Your account can be established as early as the effective date of your HDHP coverage. However, if your coverage begins on any day other than the first day of the month, you cannot establish your account until the first day of the following month. I want to make sure my HSA is “established” as soon as possible. Can I establish my account before my HDHP coverage begins? You can complete all the paperwork and make a minimum deposit to your account prior to the effective date of your HDHP coverage. However, your account is not officially “established” until your HDHP coverage begins. But completing the necessary steps before your coverage begins ensures that your HSA will be “established” as early as possible. This is especially important when your HDHP coverage is effective on a non-business day. | |||