HSA Bank Review: Pros, Cons, and Alternatives

HSA Bank offers a robust health savings account, as well as FSA accounts and more.

A Health Savings Account (HSA) offers triple tax benefits. It allows you to contribute pre-tax dollars and spend them tax-free on qualified medical expenses.

Then, after you turn 65, your HSA funds can be withdrawn and spent just like retirement funds! Learn more about how an HSA is similar to a secret IRA.

For these reasons, opening an HSA can be a great way to prepare for near-term health care expenses and future retirement. But to use an HSA, you’ll need to be enrolled in a high-deductible health plan (HDHP).

There are a lot of expenses that are eligible for use with an HSA. To get started, you’ll need an HSA provider to hold your HSA funds. In this article, we’ll review HSA Bank, an HSA provider.

See how an HSA bank compares in our list of the best HSA providers.

HSA Bank is a leader in the direct-to-consumer healthcare industry. It offers HSA, FSA, and HRA accounts for individuals, employers, and partners.

HSA banks began offering Medical Savings Accounts (MSAs) in 1997, but have slowly begun to transition to HSAs. By 2004, it only offered HSA accounts. In 2005, it became a division of Webster Bank, N.A., a subsidiary of Webster Financial Corporation. HSA Bank currently manages three million HSA accounts and has $14 billion in assets.

currently, An HSA bank is not accredited by the Better Business Bureau (BBB). However, they actively responded to every complaint.

HSA Bank offers medical-related savings accounts directly to consumers. These include:

• HSA (Health Savings Account)
• FSA (Flexible Spending Account)
• HRA (Health Arrangement Account)

In this article, we’ll focus on the HSA product for members, which are individuals who purchase an HSA directly from an HSA bank. Anyone who wants an HSA will need one High Deductible Health Plan (HDHP). Because of this limitation, not all health insurance plans are eligible for an HSA. Health sharing plans are not insurance and are not eligible for an HSA.

In many cases, if you switch employers, your HSA can go with you. Unlike an FSA, an HSA is not a use-it-or-lose-it type of plan. Your funds will continue to renew each year and will be available for use with eligible medical expenses.

Related to: HSA vs. FSA: Which Healthcare Savings Account is Best?

To benefit from an HSA, any spending must be on… Qualified Medical Expenses (QME). These include deductibles, coinsurance, prescriptions, dental and vision care, and more.

To pay for QMEs, you can use your HSA debit card or pay out of pocket and later reimburse yourself from your HSA account. You can also withdraw money from an ATM using your HSA debit card.

There are spending limits on an HSA debit card. You can spend $5,000 a day at healthcare-specific merchants, such as a doctor’s office or hospital. $3,500 per day can be spent at non-health care merchants, such as grocery stores or retail stores.

HSA funds spent on non-QMEs are taxable and will be subject to a tax penalty. This penalty ends after the age of 65. If you lose your HDHP at some point, your HSA funds will remain with the HSA bank and can be used for QMEs. You can’t contribute to an HSA anymore.

All HSAs have different contribution limits and are the same across HSA providers. The next frontier is 2026.

An HSA account is more than just a savings account. You can also invest your HSA funds once you have at least $1,000 in your account. With an HSA bank, if you want to invest, you have to do so through their HSA Invest platform, which has an annual fee, however, HSA Invest’s annual fee is waived for any quarter when your average HSA cash balance for that quarter is $7,500 or more.

Annual fees are 0.10% for selection, 0.25% for selection, and 0.35% for management. The Basic (Choice) level is a simplified mediation experience that you can implement yourself.

HSA Bank no longer charges a monthly service fee on any of its accounts, which is a big plus. Customers will likely incur two fees (although both can be avoided):

• Printed HSA account summary fees — $1.50 (can be waived by opting in for electronic statements)
• HSA closing fees — $25.00

Also, there are annual fees for HSA Invest based on your investment selection: 0.10% for selection, 0.25% for selection, and 0.35% for managed investing.

An HSA bank makes it easy to open an HSA account and invest your money once you’ve saved at least $1,000. It is one of the few HSA providers that does not charge any service fees regardless of the account balance.

However, if investing is your goal, consider using an HSA account at Fidelity since there is no minimum to start investing.

If you want to see how an HSA bank compares, check out this quick chart:

You can visit the HSA Bank website to open an account. Filling out the online application only takes about 10 minutes and there is no application fee.

Yes — HSA funds are on deposit with Webster Bank, a member of the Federal Deposit Insurance Corporation (FDIC). Your funds are protected up to $250,000. In addition, the HSA Bank website uses encryption.

We were impressed to find that HSA Bank offers 24/7 customer service. There are a variety of ways to contact a support representative. These include:

• Telephone (English): 800-357-6246 | 414-978-5294
• Telephone (Spanish): (866) 357-6232
• Email: [email protected]

You can also start a live chat with a support staff after logging in to your member account. HSA Bank has an A- rating in Better Business Bureau (BBB) Complaints were promptly responded to and/or resolved after they were submitted.

Why should you trust us?

We’ve been covering HSAs and reviewing HSA products for nearly 10 years. We were one of the first media outlets to highlight the use of an HSA as an IRA. The HSA has also been a tool I have personally used across several providers.

Our team has tested, tried, and used almost every HSA service available to consumers, so we’re very confident in our recommendations to you.

Yes, opening an HSA account can be a great decision. They provide a great, tax-advantaged way to cover medical expenses when you have an HDHP. You will not lose any donated money if you do not spend it.

Furthermore, HSA Bank is one of the best HSA providers available today. Their fees are reasonable, but we’re disappointed with the investment options account holders have access to through HSA Invest.

If you’re paying a lot in fees or want more investment options, you may want to consider switching to an HSA bank. For step-by-step instructions on how to change your HSA provider, check out this guide.

However, for most people, we think they’ll be happier with a Fidelity HSA or Lively — especially if you want to invest your HSA. Both Fidelity and Lively require no minimum investment, and they don’t have monthly fees either.

Let’s answer some of the most common questions we hear regarding HSA banking.

Yes, HSA Bank has a 100-year track record, more than 3 million members, and manages more than $10 billion in assets.

Can you withdraw from an HSA bank?

Yes, you can withdraw your HSA funds for out-of-pocket expenses at any time (including cash withdrawals). However, if you decide to close your account, you will be charged a fee of $25.

Can I open an HSA without an employer?

Yes, as long as you have a high deductible health plan (HDHP), you are likely eligible to open an HSA account with an HSA bank.

What is the daily limit for an HSA debit card?

The daily spending limit is $5,000 at health care providers and $3,500 at non-health care retailers such as grocery stores and department stores.