Health savings accounts come with unexpected fees, CFPB reports

Health savings accounts (HSAs) can improve affordability by allowing consumers to save pre-tax dollars to spend on healthcare services, but unexpected fees and low interest rates may outweigh the benefits, according to a report from the Consumer Financial Protection Bureau (CFPB).

HSAs are selected by employers or health insurance companies and generally come with high-deductible health plans. Employees make tax-deductible contributions to HSAs that can be used for certain healthcare expenses. Untouched contributions can earn interest and roll over each year.

HSAs held more than $116 billion in 2023, up 500 percent from 2013. Similarly, the number of accounts increased from 11.8 million to 35 million over the same timeframe.

HSA designs vary depending on the trustee and whether it is employer-sponsored or direct-to-consumer, CFPB found.

The three largest trustees, HealthEquity, Optum, and Fidelity, charge monthly maintenance fees of up to $3.95, $3.75, and $4.00. Fidelity charges monthly fees of up to $4 for HSAs opened through an employer, but there are no monthly fees for direct-to-consumer accounts.

In direct-to-consumer HSAs, individuals are responsible for paying monthly fees, but employers can choose who bears the cost in employer-sponsored accounts. Around one-third of employers assign the responsibility to employees, while 58 percent cover the fee for active employees only, and 7 percent cover the fee for active and terminated employees.

Consumers may also face transfer fees or other costs when changing HSAs. Optum charges a $20 outbound transfer fee for moving funds—part or all of their balance—to a different HSA trustee. HealthEquity and HSA Bank each charge a $25 account closure fee. HealthEquity will automatically close an account and impose a closure fee when all funds are transferred to another HSA, whether or not the consumers requested an account closure.

Transferring funds to a new HSA can take two to eight weeks, during which some trustees continue to charge maintenance fees. Consumers have also reported delays that exceeded the disclosed timeframe and experienced losing funds in transit.

Consumers may receive additional HSA fees for paper statements, ATM use, and overdrafts. HealthEquity, Optum, and HSA Bank charge paper statement fees ranging from $1 to $1.50 per statement. Some consumers have noted that trustees provide insufficient notification or opportunity to opt out of paper statements.

Optum imposes a $2.50 fee for every ATM transaction, while other smaller HSA trustees charge for overdraft of nonsufficient funds fees.

Some consumers use HSAs like they would use an investment account, but trustees typically offer low interest rates. HealthEquity’s rate starts at 0.05 percent and Optum’s starts at 0.015 percent. With the amount of maintenance fees consumers face, they may end up spending more on fees than they earn in interest. Fidelity offers a steeper interest rate of 2.69 percent, resulting in a $27.23 annual yield on a $1,000 annual balance.

HSA trustees often keep interest rates low because they profit from the spread between market interest rates and the rate provided to consumers. Trustees like HealthEquity have stated this in a public filing, but the question of why health insurance companies and employers choose to partner with trustees offering high-fee, low-yield products remains.

“The contract negotiation process involving HSA trustees, insurance companies, and employers is opaque,” the report noted. “However, the presence of issues, such as complex and costly fees, in employer-sponsored HSAs suggests that employers might focus on factors other than the terms and features of their employees’ HSAs.”