Why am I being charged a fee on my HSA?
Asked by: Adolphus Bogan | Last update: January 7, 2026Score: 4.9/5 (33 votes)
Why does my HSA charge a fee?
At the end of the day, it does cost money to provide an HSA: staff, web servers, regulatory compliance, profit, etc. So providers recoup that through fees, either as a flat dollar amount or a percentage of invested (and sometimes cash) balance.
How to avoid HSA service fee?
Monthly account fees for HSAs are generally less than $5, and many HSA administrators have no monthly fee at all. And it's common for monthly account fees to be reduced or waived if you maintain a minimum account balance, which is usually in the range of $1,000 to $5,000.
How to waive HSA fee?
Like traditional checking accounts, HSAs can charge monthly account maintenance fees, ranging from $2.50 to $4.50. Sometimes you can get those fees waived if your account balance is over a certain threshold, usually between $2,000 to $5,000.
Is there a convenience fee for HSA?
While healthcare providers cannot charge a surcharge for using a Flexible Savings Account (FSA) or Health Savings Account (HSA) card, they may be able to charge a convenience fee if certain conditions are met.
HSA vs FSA For Beginners | How Much Money Should You Contribute To An HSA or FSA Savings Plan?
Which HSA has no fees?
There are zero account fees and zero account minimums for Fidelity HSAs® offered through Fidelity.com to individuals and employers.
How much should I pay to my HSA?
The short answer: As much as you're able to (within IRS contribution limits), if that's financially viable. If you're covered by an HSA-eligible health plan (or high-deductible health plan), the IRS allows you to put as much as $4,300 per year (in 2025) into your health savings account (HSA).
How do I avoid HSA penalty?
To avoid a tax penalty, many advisors recommend you stop contributing to your HSA at least 6 months before you apply for Medicare. NOTE: It may take several weeks to process a request to stop any automatic contributions.
Can I get my HSA money back?
As a practical matter, you are allowed to withdraw funds from your HSA at any time for any reason. But if you aren't using the funds to cover a qualified medical expense, then you'll be stuck paying a penalty tax.
What happens when my HSA balance is $0?
Will my HSA account remain open if I have a $0 balance? The account will remain open if you have a $0 balance. There is no fee assessed to you for having a $0 balance.
Why should I not use my HSA?
While you can use your HSA to pay or be reimbursed for qualified medical expenses, if you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% federal tax.
Can I deduct HSA fees?
You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you don't itemize your deductions on Schedule A (Form 1040). Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income.
How to avoid HSA monthly fees in Optum?
Remember, by using your Health Savings Account Debit MasterCard® you can avoid many of the fees associated with your HSA. When you use your Health Savings Account CardSM at the point of service, your monthly statements and online account information will show you exactly where you spent your HSA funds.
What are the hidden fees for HSA?
Hidden HSA costs
These fees include monthly maintenance, paper statements, outbound transfers, and account closure fees. The agency says these charges can eat into the funds allocated for healthcare needs, directly reducing the benefits of tax savings afforded by HSAs.
What happens if I don't have enough money in my HSA?
If you do not have enough money in your HSA to pay for an eligible medical expense you will need to pay for the expense by some other means. Once the money is in your HSA account, you can withdraw the amount that you paid and reimburse yourself.
Is HSA really tax free?
The money you contribute to a health savings account is tax-deductible or pre-tax, and any increase in the value of your account (such as through capital gains and dividends on investments held in the HSA) is free from federal taxes — so long as withdrawals are made for qualified medical expenses (see No. 6).
What happens if I accidentally use my HSA card for non-medical expenses?
You can repay the incorrect distribution before filing your federal taxes for that tax year. However, if you do not correct the mistake, the unqualified amount will be subject to income tax, and you may also face an additional 20% tax penalty.
Why is my HSA being taxed?
Any contributions above the IRS set limit will be considered as taxable income. If you over contribute to your HSA and don't correct it, you may be charged a 6% penalty rate each year on the excess that remains in your account. Although funds in your HSA are tax-free, tax penalties may arise.
Is HSA worth it?
One of the biggest advantages of an HSA is that it offers a triple tax advantage, which means: Contributions to an HSA are federally tax-deductible, reducing your taxable income. Depending on where you live, you may also get a break on state income taxes. Assets in an HSA can potentially grow federal tax-free.
Can I cash out my HSA?
Yes, you can withdraw funds from your HSA at any time. But please keep in mind that if you use your HSA funds for any reason other than to pay for a qualified medical expense, those funds will be taxed as ordinary income, and the IRS will impose a 20% penalty.
Is HSA better than 401k?
Comparing HSAs and 401(k)s
The triple-tax-free aspect of an HSA makes it better for tax management than a 401(k). However, since HSA withdrawals can only be used for healthcare costs, the 401(k) is a more flexible retirement savings tool. The fact that an HSA has no RMD gives it more flexibility than a 401(k).
What happens to my HSA if I never use it?
Myth #2: If I don't spend all my funds this year, I lose it. Reality: HSA funds never expire. When it comes to the HSA, there's no use-it-or-lose-it rule. Unlike Flexible Spending Account (FSA) funds, you keep your HSA dollars forever, even if you change employers, health plans, or retire.
What is a good HSA balance?
If you're unsure of where to start, try working with a financial advisor. What Is the Average HSA Balance By Age? The average HSA balance for a family is about $7,500 and for individuals it is about $4,300. This average jumps up to $12,000 for families who invest in HSAs.
Should I max out my HSA every year?
If you're able to make the maximum contribution each year, then it's suggested that you do so. Some years you may need to use more of your HSA contributions than other years. Just remember, there's no yearly minimum you have to spend from your HSA and your entire HSA automatically rolls over each year.
Is an HSA or FSA better?
Bottom line: Both HSAs and FSAs provide financial benefits for managing health care expenses. HSAs offer more flexibility and long-term growth potential, making them a valuable tool for future financial planning. Learn about HSA options from Aetna.