HSA Plan With Credit Card and Self-Directed Investments
W
1) Allows employees to use a credit card with the account, that is
programmed to only charge for authorized items under the plan.
2) Also allows self-directed investments (bonds / stocks) for any surplus
amounts in the plan.
I'm finding generally the firms who allow 1) do not allow 2), and vice
versa.
--
W
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Bob Sandler
>
>1) Allows employees to use a credit card with the account, that is
>programmed to only charge for authorized items under the plan.
>
>2) Also allows self-directed investments (bonds / stocks) for any surplus
>amounts in the plan.
>
>I'm finding generally the firms who allow 1) do not allow 2), and vice
>versa.
How do they do 1)? If you go into a drugstore, how does the
card processor know whether you are buying medicine or
shampoo? I am under the impression that the credit card
machine just transmits the total amount of the charge, with
no description of the items purchased.
Bob Sandler
Barry Margolin
Bob Sandler <bob_u...@yahoo.com> wrote:
> >Does anyone know of an HSA plan administrator who:
> >
> >1) Allows employees to use a credit card with the account, that is
> >programmed to only charge for authorized items under the plan.
> >
> >2) Also allows self-directed investments (bonds / stocks) for any surplus
> >amounts in the plan.
> >
> >I'm finding generally the firms who allow 1) do not allow 2), and vice
> >versa.
>
> How do they do 1)? If you go into a drugstore, how does the
> card processor know whether you are buying medicine or
> shampoo? I am under the impression that the credit card
> machine just transmits the total amount of the charge, with
> no description of the items purchased.
When I used my HSA card at a drugstore last week, the receipt had some
indication that it was an HSA account. I assume the POS terminal would
have rejected the card if I tried to use it for non-approved items.
BTW, one of the versions of the health care bill doesn't allow HSA to be
used for OTC medicine.
--
Barry Margolin, bar...@alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
D.F. Manno
> How do they do 1)? If you go into a drugstore, how does the
> card processor know whether you are buying medicine or
> shampoo? I am under the impression that the credit card
> machine just transmits the total amount of the charge, with
> no description of the items purchased.
On the Web sites of the big drugstore chains, HSA-authorized items are
flagged with a symbol.
--
D.F. Manno | dfm...@mail.com
And if there were a God, I think it very unlikely that He would
have such an uneasy vanity as to be offended by those who doubt His
existence. (Bertrand Russell)
John Levine
>
>1) Allows employees to use a credit card with the account, that is
>programmed to only charge for authorized items under the plan.
>
>2) Also allows self-directed investments (bonds / stocks) for any surplus
>amounts in the plan.
HSA Bank (www.hsabank.com) may do what you want. Their regular HSA
account pays reasonable interest, currently 2% if your balance is over
$15K, and they give you a checkbook and a Visa debit card. They say
the card only works at merchants providing medical goods and services,
but never having tried to use it for a non-medical purchase I can't
say what would happen if I tried it. It's clearly coded by merchant,
not product, so if you went to the drugstore and used it to buy beer,
it'd probably work.
If 2% isn't enough, they have a mutual fund option with a so-so set
of funds, or you can open a companion account at TD Ameritrade and
buy whatever you want.
I had my HSA and previous MSA there for about a decade, and never had
any problems with them, although I didn't try any of the investment
options. I moved my account last year because my local community bank
started offering HSAs.
R's,
John
W
news:vi95k5l8tbrjljhnq...@4ax.com...
> >Does anyone know of an HSA plan administrator who:
>>
>>1) Allows employees to use a credit card with the account, that is
>>programmed to only charge for authorized items under the plan.
>>
>>2) Also allows self-directed investments (bonds / stocks) for any surplus
>>amounts in the plan.
>>
>>I'm finding generally the firms who allow 1) do not allow 2), and vice
>>versa.
>
> How do they do 1)? If you go into a drugstore, how does the
> card processor know whether you are buying medicine or
> shampoo? I am under the impression that the credit card
> machine just transmits the total amount of the charge, with
> no description of the items purchased.
My understanding is that the larger drugstores have now coded their over the
counter items with a code that designates the item as approved for HSA
expenditures. Pretty nice if true. We have employees who have such
credit cards through a spouse's plan, and they swear by the convenience of
this.
--
W
paulthomascpa
"John Levine" <jo...@iecc.com> wrote
> >Does anyone know of an HSA plan administrator who:
>>
>>1) Allows employees to use a credit card with the account, that is
>>programmed to only charge for authorized items under the plan.
>>
>>2) Also allows self-directed investments (bonds / stocks) for any surplus
>>amounts in the plan.
>
> HSA Bank (www.hsabank.com) may do what you want. Their regular HSA
> account pays reasonable interest, currently 2% if your balance is over
> $15K, and they give you a checkbook and a Visa debit card.
But I bet they don't allow self-directed investments. It's a control issue
for the HSA administrator.
I wonder if you are allowed to have multiple HSA's, similar to you having
multiple IRA's, and one is funded for the credit/debit card transactions,
usually through a bank, and the other one can hold the self-directed
investments portion.
--
Paul Thomas, CPA
www.paulthomascpa.com
John Levine
>> account pays reasonable interest, currently 2% if your balance is over
>> $15K, and they give you a checkbook and a Visa debit card.
>
>But I bet they don't allow self-directed investments. It's a control issue
>for the HSA administrator.
Bet accepted. Is there some reason you snipped the following sentence
out of the message you quoted?
If 2% isn't enough, they have a mutual fund option with a so-so set
of funds, or you can open a companion account at TD Ameritrade and
buy whatever you want.
If "companion account" or "buy whatever you want" is unclear, I'll be
happy to provide more details.
R's,
John
paulthomascpa
"John Levine" <jo...@iecc.com> wrote in message
news:hhvt1t$110n$1...@gal.iecc.com...
>>> HSA Bank (www.hsabank.com) may do what you want. Their regular HSA
>>> account pays reasonable interest, currently 2% if your balance is over
>>> $15K, and they give you a checkbook and a Visa debit card.
>>
>>But I bet they don't allow self-directed investments. It's a control issue
>>for the HSA administrator.
>
> Bet accepted. Is there some reason you snipped the following sentence
> out of the message you quoted?
>
> If 2% isn't enough, they have a mutual fund option with a so-so set
> of funds, or you can open a companion account at TD Ameritrade and
> buy whatever you want.
>
> If "companion account" or "buy whatever you want" is unclear, I'll be
> happy to provide more details.
Don't get all snippety. Seems like if HSA bank allowed you to self-direct
the part that is in HSA bank, you'd have said so. There wouldn't be any
need to stroll over to TD Ameritrade to handle the self directed part. And
apparently TD Ameritrade doesn't provide the credit/debit card services.
So.......where were we?
--
Paul Thomas, CPA
www.paulthomascpa.com
--
Seth
>How do they do 1)? If you go into a drugstore, how does the
>card processor know whether you are buying medicine or
>shampoo? I am under the impression that the credit card
>machine just transmits the total amount of the charge, with
>no description of the items purchased.
The receipt I get shows how much is HSA-eligible, so the store (CVS)
knows. If they also know the card itself is an HSA card, they can
limit the charges.
Personally, I prefer to earn airline miles using my own credit card,
and let the HSA reimburse my bank account.
Seth
W
news:DcmdnaBkLcWUNN7W...@giganews.com...
> "John Levine" <jo...@iecc.com> wrote in message
> news:hhvt1t$110n$1...@gal.iecc.com...
> >>> HSA Bank (www.hsabank.com) may do what you want. Their regular HSA
> >>> account pays reasonable interest, currently 2% if your balance is over
> >>> $15K, and they give you a checkbook and a Visa debit card.
> >>
> >>But I bet they don't allow self-directed investments. It's a control
issue
> >>for the HSA administrator.
> >
> > Bet accepted. Is there some reason you snipped the following sentence
> > out of the message you quoted?
> >
> > If 2% isn't enough, they have a mutual fund option with a so-so set
> > of funds, or you can open a companion account at TD Ameritrade and
> > buy whatever you want.
> >
> > If "companion account" or "buy whatever you want" is unclear, I'll be
> > happy to provide more details.
>
> Don't get all snippety. Seems like if HSA bank allowed you to self-direct
> the part that is in HSA bank, you'd have said so. There wouldn't be any
> need to stroll over to TD Ameritrade to handle the self directed part. And
> apparently TD Ameritrade doesn't provide the credit/debit card services.
> So.......where were we?
But that scenario still has some utility. Keep HSA under HSA Bank's
account for a year, and then roll over the surplus to the Ameritrade HSA.
Over a 10 year period you might get enough in the Ameritrade side to be
interesting, if you manage to stay healthy anyway.
--
W
paulthomascpa
"W" <persis...@spamarrest.com> wrote
> But that scenario still has some utility. Keep HSA under HSA Bank's
> account for a year, and then roll over the surplus to the Ameritrade HSA.
> Over a 10 year period you might get enough in the Ameritrade side to be
> interesting, if you manage to stay healthy anyway.
Still, not one place provides for both needs.
D. Stussy
> >Does anyone know of an HSA plan administrator who:
> >
> >1) Allows employees to use a credit card with the account, that is
> >programmed to only charge for authorized items under the plan.
> >
> >2) Also allows self-directed investments (bonds / stocks) for any
surplus
> >amounts in the plan.
>
> HSA Bank (www.hsabank.com) may do what you want. Their regular HSA
> account pays reasonable interest, currently 2% if your balance is over
> $15K, and they give you a checkbook and a Visa debit card. They say
> the card only works at merchants providing medical goods and services,
> but never having tried to use it for a non-medical purchase I can't
> say what would happen if I tried it. It's clearly coded by merchant,
> not product, so if you went to the drugstore and used it to buy beer,
> it'd probably work.
>
> If 2% isn't enough, they have a mutual fund option with a so-so set
> of funds, or you can open a companion account at TD Ameritrade and
> buy whatever you want.
Are you certain that TD Ameritrade has HSAs? They didn't offer it when I
asked them in 2004 and 2005. I ended up opening my HSA at State Farm Bank
(a company related to the insurer of the same name), because they were the
only trustee I found that didn't require another account. I'm still there.
> I had my HSA and previous MSA there for about a decade, and never had
> any problems with them, although I didn't try any of the investment
> options. I moved my account last year because my local community bank
> started offering HSAs.
--
Stuart A. Bronstein
> "John Levine" <jo...@iecc.com> wrote
>> HSA Bank (www.hsabank.com) may do what you want. Their regular
>> HSA account pays reasonable interest, currently 2% if your
>> balance is over $15K, and they give you a checkbook and a Visa
>> debit card.
>>
>> set of funds, or you can open a companion account at TD
>> Ameritrade and buy whatever you want.
>
> Are you certain that TD Ameritrade has HSAs? They didn't offer
> it when I asked them in 2004 and 2005. I ended up opening my
> HSA at State Farm Bank (a company related to the insurer of the
> same name), because they were the only trustee I found that
> didn't require another account. I'm still there.
I have a recollection of hearing that these accounts would lose
whatever amount is left at the end of the year. Is that the case?
If not, what am I thinking of?
--
Stu
http://downtoearthlawyer.com
D. Stussy
news:Xns9CF79BA67E21Ds...@130.133.4.11...
> "D. Stussy" <spam+ne...@bde-arc.ampr.org> wrote:
> > "John Levine" <jo...@iecc.com> wrote
> >> HSA Bank (www.hsabank.com) may do what you want. Their regular
> >> HSA account pays reasonable interest, currently 2% if your
> >> balance is over $15K, and they give you a checkbook and a Visa
> >> debit card.
> >>
> >> If 2% isn't enough, they have a mutual fund option with a so-so
> >> set of funds, or you can open a companion account at TD
> >> Ameritrade and buy whatever you want.
> >
> > Are you certain that TD Ameritrade has HSAs? They didn't offer
> > it when I asked them in 2004 and 2005. I ended up opening my
> > HSA at State Farm Bank (a company related to the insurer of the
> > same name), because they were the only trustee I found that
> > didn't require another account. I'm still there.
>
> I have a recollection of hearing that these accounts would lose
> whatever amount is left at the end of the year. Is that the case?
> If not, what am I thinking of?
Maybe FSAs (Flexible spending accounts) under employers' cafeteria plans.
Mark Bole
>> I have a recollection of hearing that these accounts would lose
>> whatever amount is left at the end of the year. Is that the case?
>> If not, what am I thinking of?
>
> Maybe FSAs (Flexible spending accounts) under employers' cafeteria plans.
>
Yes, FSA's are "use it or lose it" plans.
Or, there is a Health Reimbursement Arrangement (HRA aka HCRA) which is
funded totally by the employer, totally tax-free to the employee, and
which does rollover from one year to the next, but the unused balance
can never be given to the employee.
Generally, participation in a FSA or HRA precludes making contributions
to an HSA, but there are exceptions.
Pub 969 is a handy summary of all the well-known tax-advantaged health
care reimbursement plans, Pub 15-B tells the employer's side of the story.
-Mark Bole
John Levine
>> of funds, or you can open a companion account at TD Ameritrade and
>> buy whatever you want.
>>
>> If "companion account" or "buy whatever you want" is unclear, I'll be
>> happy to provide more details.
Sheesh, I guess "companion account" is indeed unclear.
Your HSA at HSA Bank is one (1) account, with multiple investment
options. Unless you tell them otherwise, your HSA assets are in an
interest bearing account at the bank, from which you can make
withdrawals using checks or a debit card.
You can tell HSA Bank that you want a self-directed investment
account. To do so you fill out an Ameritrade brokerage application
and sent it back to HSA Bank. This isn't Ameritrade's normal
application, it's some sort of custody account via HSA Bank. Then
when it's set up you can visit HSA Bank's web site to slosh money back
and forth between the bank account and the Ameritrade account, and you
can visit Ameritrade's web site to buy and sell all of the stuff they
let you buy. The account has the same restrictions as a Keogh or IRA,
e.g., no margin and no options.
It's still one HSA, the only way to get money in or out of the
brokerage account is via the HSA bank account. Info is here:
http://www.hsabank.com/hsabank/Accountholders/Investments/TD_Ameritrade.aspx
If you're looking for an HSA account where you can use your debit card
to take money directly out of the brokerage account, selling
securities as needed, I'd be rather surprised if there were such a
thing, since that kind of account intrinsically requires margin credit
to cover the three days it takes to settle a stock sale, and I've
never seen a retirement account with margin.
I've also seen HSAs which are just investment accounts, with no checks
or debit cards. For those, you keep track of your medical expenses,
and once or twice a year you mail them a request for reimbursement and
they they mail you a check. If your cashflow is good enough, this can
be more financially advantageous than paying directly out of the HSA
particularly if as someone noted you pay with your regular credit card
and get points or a rebate.
Someone else asked whether you lose your account at the end of the
year. No, that's an FSA. An HSA is yours to keep. The rules for
non-medical withdrawals are similar to the rules for an IRA.
R's,
John
Seth
> The account has the same restrictions as a Keogh or IRA,
>e.g., no margin and no options.
I can buy options in an IRA. (I'm not sure if I can write covered
calls.)
Seth
Arthur Kamlet
>In article <hi0sbl$11o2$1...@gal.iecc.com>, John Levine <jo...@iecc.com> wrote:
>
>> The account has the same restrictions as a Keogh or IRA,
>>e.g., no margin and no options.
>
>I can buy options in an IRA. (I'm not sure if I can write covered
>calls.)
Let's say you bought some puts and the market has gone way way down,
and the puts are about to expire way in the money.
The IRA custodian has a fiduciary duty to exercise them for you, but
you have no stock to deliver. So broker buys the stock, then delivers
it so you can put the put seller.
And in doing so you exceeded your annual IRA contribution limit.
Similar argument for buying calls, where market falls except for your
stock. To protect you from call expiring while far in the money
broker exercises call for you, immediately causing you to make more
than allowed IRA contributiions.
One might wonder why broker in such a position with in the money
calls about to expire doesn't just sell the calls? Because brokers
simply don't do that.
I can understand brokers allowing you to write covered calls in
an IRA, but am really surprised to hear they will let you buy options.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
Seth
Arthur Kamlet <-T...@panix.com> wrote:
>In article <hi17ip$t5t$3...@reader1.panix.com>, Seth <se...@panix.com> wrote:
>>In article <hi0sbl$11o2$1...@gal.iecc.com>, John Levine <jo...@iecc.com> wrote:
>>
>>> The account has the same restrictions as a Keogh or IRA,
>>>e.g., no margin and no options.
>>
>>I can buy options in an IRA. (I'm not sure if I can write covered
>>calls.)
>
>Let's say you bought some puts and the market has gone way way down,
>and the puts are about to expire way in the money.
>
>The IRA custodian has a fiduciary duty to exercise them for you, but
>you have no stock to deliver. So broker buys the stock, then delivers
>it so you can put the put seller.
>
>And in doing so you exceeded your annual IRA contribution limit.
I have made *no* contribution. (Rather, the IRA custodian sells the
puts before they expire, for $0.05 less than they're worth; anybody
who was thinking of selling anyway would buy them, and make $.05 per
share more than otherwise; or an arbitrageur will grab the deal.)
What would happen (and did, in a non-IRA account) is that the broker
_borrows_ the stock and _delivers_ against the put. My account is
then short the stock, and eventually I have to buy it to cover the
shortage.
That can't happen in an IRA, because the IRA can't borrow.
>Similar argument for buying calls, where market falls except for your
>stock. To protect you from call expiring while far in the money
>broker exercises call for you, immediately causing you to make more
>than allowed IRA contributiions.
A contribution is made whan *I* contribute money to an account. It is
not made because a broker does transactions in the account.
>One might wonder why broker in such a position with in the money
>calls about to expire doesn't just sell the calls? Because brokers
>simply don't do that.
Sometimes they do. I've used brokers who will do whatever I tell them
(in the market, subject to legality and me having enough money to
cover it).
>I can understand brokers allowing you to write covered calls in
>an IRA, but am really surprised to hear they will let you buy options.
But they do.
Seth
John Levine
>>>e.g., no margin and no options.
>>
>>I can buy options in an IRA. (I'm not sure if I can write covered
>>calls.)
>
>Let's say you bought some puts and the market has gone way way down,
>and the puts are about to expire way in the money.
>
>The IRA custodian has a fiduciary duty to exercise them for you, but
>you have no stock to deliver. So broker buys the stock, then delivers
>it so you can put the put seller.
Since IRA's can't borrow, they'd best only do that if you have enough
cash in the account to buy the stock. Ditto exercising calls.
Never having done this, I dunno what the really do. If anyone really
cares, it should be easy enough to call a few brokers and ask.
R's,
John
Stuart A. Bronstein
> Arthur Kamlet <-T...@panix.com> wrote:
>>
>>Let's say you bought some puts and the market has gone way way
>>down, and the puts are about to expire way in the money.
>>
>>The IRA custodian has a fiduciary duty to exercise them for you,
>>but you have no stock to deliver. So broker buys the stock,
>>then delivers it so you can put the put seller.
>>
>>And in doing so you exceeded your annual IRA contribution limit.
>
> broker _borrows_ the stock and _delivers_ against the put. My
> account is then short the stock, and eventually I have to buy it
> to cover the shortage.
>
> That can't happen in an IRA, because the IRA can't borrow.
The owner of an IRA can't borrow from the IRA. But I am aware of
no rule that prohibits the IRA from borrowing. IRAs are not
supposed to buy anything on margin, because it can't meet margin
calls.
>>I can understand brokers allowing you to write covered calls in
>>an IRA, but am really surprised to hear they will let you buy
>>options.
>
> But they do.
It's uncovered calls that are the problem, not covered calls.
--
Stu
http://downtoearthlawyer.com
Rich Carreiro
This is not speculative -- it is what I've personally been approved for
options-wise in my IRAs (I don't actually trade options in them, but
I wanted to have the flexibility in case I ever wanted to). This is
the "highest" Fidelity-allowed use of options in an IRA:
Purchase of Calls/Puts (equity and index)
Purchase of Straddles/Combinations (equity and index)
--
Rich Carreiro rlc-...@rlcarr.com
rick++
> 2) Also allows self-directed investments (bonds / stocks) for any surplus
> amounts in the plan.
I asked my Massachusetts-HQ'd mega-brokerage advisor about this.
He said they dont offer them yet because the reimbursement-checking
is expensive for relatively small accounts.