I hope this email finds everyone hanging in there and doing well. I know it has been a wild and interesting month of July for myself!
I am sending this along to everyone I had in my contact list on the CRE Services side (all consultants I know had health insurance, along with Dennis Stejskal, Tom and Kerrie); however, I do not know if you were on the High Deductible Health Plan with an HSA account when MIS was with ADP TotalSource (for 2008).
I had used all but 5 cents of my HSA, so I just left the account at that balance and presumed they would take that as much as they could with the monthly fees until it was zero and I could cut up the cards and be done with it...BUT that isn't what happened.
They have continued to deduct the $3/month fee since that time and now the account is in a negative situation. While the letter I received states they will close the account at year-end, it doesn't state what will be reported negatively on my credit history because of this automatic closure.
WARNING: If you have a Chase Health Savings account in a similar situation, you must contact them to officially close it or will be subject to the same issue. As far as I know, this doesn't mean the HSA Bank account we used in 2009 is treated the same way, but I would almost presume this is a common practice, so beware if you have an account with HSA bank that has been depleted of funds.
One more thing you should know...to close the account, they are going to send you a letter to officially close the account and you must send this back to them along with a check for the negative amount AND the $10 fee to close it. Yes...you have to PAY THEM $10 to close the account. And, contrary to popular belief, this is a "checking" type account and not a "savings" account like the title says...thus why they can treat it this way and allow it be overdrawn due to fees.
Just thought you might want to know before your negative balance gets very large.
The number for the Chase Bank HSA member services center is 866-524-2483.
Good Luck to each of you and take care!
ALL Health Savings Accounts are technically either NOW accounts or a derivative form of either an investment or trust account. I know of no HSA administrator where they are actually true savings accounts from a regulatory standpoint.
ReplyDeleteThe reason is that true savings accounts have regulatory transaction limits - historically 3 (but just changed to 6) disbursements per month. Since a huge percentage of HSA account holders are frequent transactors it is impractical for custodians to set them up as savings accounts. People who have more than the limit have to have their accounts either closed, or converted to a different type of account. Therefore it is much more effective for custodians to make them a different type of account from a regulatory perspective.
Yes, they are called 'Health Savings Accounts' - but that is because that is what the government calls them. The regulations for all types of HSA accounts require the custodians to disclose the fee structure AND the fact that they aren't in fact 'savings' accounts. That said, the fact that they come with checks and a debit card should also make it pretty clear.
While the contributor mentions Chase and HSA bank explicitly, Optum (United), BofA, and most if not all the rest have similar practices. For all intents and purposes it is a checking account and/or an investment account and I don't know why the expectation would exist for this type of account vs. any other type of checking account like at your community bank that you can simply choose to not pay the monthly fees that you've agreed to pay when you opened the account. Why should such an expectation exist?
With that said though none of the 'specialists' HSA custodians (e.g. HSA, Optum, HealthEquity, etc.) do credit reporting on overdrawn accounts. At a certain point the regulators do force them to write-off the accounts as a credit loss, but practices vary whether they actually close the account at that point or leave it open and try to collect.
The large banks such as Wells, BofA, Citi, Chase, etc. may well credit report on negative accounts because they are leveraging their own internal infrastructure which tend to treat these accounts as part of the broader class of products to which they belong (checking and/or investment accoutns) and credit reporting and/or collections on overdrawn accounts is part of their embedded risk management infrastructure.
Word to the wise. Call them up. They are VERY well aware of the problem of accounts that go negative due to service fees vs. spending and many - but not all - have products that allow $0 account types that they can switch you into if your account is dormant, but you may fund it at a later point in time.
Here is what I learned today:
ReplyDeleteFor those that used the HSA Banking:
Yes, the account can go negative with the monthly fee, if the overdraft is $25 or more, they will collect the overdraft from you.
You can continue to contribute to the account if you have a payroll check to deduct from.
If your balance is over $25 when you request to close the account they have to send you paperwork to complete it. I assume if less, they would just close it at your request.
They charge $25 to close the account. I complained about this, and she reduced it to $15.
So, as well feel the pain, MIS didn't contribute my deductions, nor the $100 the month they used to encourage us to use the plan (of course as a part of draw, I had to deduct this from my earnings, a double hit).
I forgot to ask if they have a -0- account type so I am not sure on that.
Thanks for getting this information out to us so we can proactivly take care of everything.
Laura Madeira
Contact information for HSA Bank some of us used in 2009: You will need your account number, social security number, and verify your address.
ReplyDeleteEmail: askus@hsabank.com
(800) 357-6246
HSA Bank
P.O. Box 939
Sheboygan, WI 53082-0939
Fax: (877) 851-5274
To get around the fee, I am transferring all of the funds to my own personal account, via the HSA Bank website (all $29 of it!) and then calling to close the account. Pam mentioned in the google group that when she did this, they just closed the account for her no fee.
ReplyDeleteWorth trying to save $25 :)
Laura Madeira
My original post above did work, I transfered out all of my HSA funds, then called to close the account. They did it without asking any questions.
ReplyDeleteLaura Madeira
Blogs are good for every one where we get lots of information for any topics nice job keep it up !!!
ReplyDeleteOne of the reasons I enjoy just spending time reading other blogs is I learn something new , thanks for helping me gain a better understanding