7 Tips to Choosing the Best HSA Account

A health savings account, or HSA, is exactly what the name implies: a financial account that can be used to save money for future medical expenses. These accounts, combined with a high-deductible health insurance plan, also offer certain income tax breaks that make them even more attractive.

But which health savings account offers the best deal?

The answer depends in part on how the account will be used, according to Liz Ryan, senior vice president of the health benefit services group at Wells Fargo in Minneapolis. Most people fund an HSA and then use the money to pay for recurring or occasional medical costs either immediately or over time. But some use an HSA to accumulate savings for anticipated medical costs far in the future.

"Are you going to use the account to pay for medical expenses in the current year or to set aside (money) to invest?" Ryan asks.

Either way, it's a good idea to shop around for a health savings account. Banks, credit unions, insurance companies and other financial institutions, referred to as "administrators" or "custodians," offer HSAs, and each has its own policies and fees.

Here are seven factors to consider:

1. Convenience

Some HSA custodians are big banks that have a network of branches and automated teller machines, or ATMs, across the country. Others are smaller institutions or online banks that don't have branches or ATMs, but interact with customers only via mail, a telephone call center or website. Customers who like to talk to a live person should find out what days and hours the branch or call center is open before they open an account.

2. Access

Most HSAs offer checks or a debit card. Ryan is a fan of the latter because it can be used at the point of purchase or point of care to pay directly for medical products or services.



Some older health savings accounts require disbursement and reimbursement forms, which can be a hassle for consumers and cause delays in payment, according to Kirk Hoewisch, president of HSA Bank in Milwaukee.

"Some of our competitors -- it's easy to put money in and hard to take it out. They don't offer checks or debit cards. It's not as common as it used to be, but still exists," he says.

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