When looking for the right health savings account custodian, you’ll quickly discover there are almost as many fee options to consider as there are custodians themselves.
These fees, however, generally fall into a handful of categories. And once you have a better understanding of these categories, and the service options that go along with the fees in question, you’ll be better prepared to find the right blend of fees and services to fit an employer’s unique situation.
Many custodians charge employers a large implementation fee for general setup or specific services. These fees typically are based on a flat rate, by the capabilities selected, or an hourly programming rate. When an hourly rate is involved, custodians should be able to estimate the programming time required and maximum charges.
Most of the fees charged to employers after HSA accounts are set up fall into two classifications: fees incurred due to special circumstances and fees incurred during the normal course of business.
Fees incurred due to special circumstances include charges for things like overdrafts, removing excess contributions and correcting Internal Revenue Service reports.
Fees incurred during the normal course of business can include fees for transactions, monthly statements, check printing and withdrawal requests. Because these fees are based on the activity in an account, benefit advisors should determine how employees are likely to use their accounts to calculate the resulting financial impact. If employees are expected to use these services heavily, a custodian that does not have as many of these fees may be the better choice.
However, during the upcoming open enrollment season, expect to see a shift away from HSA custodians charging employers a combination of monthly and special fees toward a per-employee per-month fee.