10 must-have features for choosing an HSA vendor
Get an in-depth understanding of HSA vendors and their services. Our guide covers everything you should come to expect from HSA providers.
The top 10 features for selecting an HSA vendor
When it comes to choosing a Health Savings Account (HSA) vendor, there are several important features they should have in place. After all, it’s critical to work with a top HSA vendor to ensure the employee spending account program is a success! In this blog, we will explore the ten features to look for when comparing HSA vendors and how each can impact the experience and financial outcomes.
1. Great support and servicing
Good customer service is crucial when choosing an HSA vendor. A responsive customer support team that can help you with any questions or issues is essential. While some providers may brag about their AI bots, people are still better than bots when it comes to customer service. Look for a vendor that offers excellent customer service and support to ensure that any issues or questions can be addressed promptly.
2. Low fees
The fees that an HSA vendor charges for managing your account and fees embedded in investment options are one of the most important factors to consider when choosing a vendor. Look for vendors that offer low fees and transparent pricing with no hidden costs or fees. Also, look for low-cost investment options such as ETFs offered by reputable investment firms like Vanguard or Schwab, which typically offer the lowest expense ratios.
3. Low minimum investments
Many HSA providers set high investment minimums to trick their customers into keeping their HSAs in cash accounts. However, not every member has the luxury of fully funding their accounts while managing their healthcare needs. A big driver of HSAs is the ability to invest and grow HSA funds. Look for an HSA vendor that allows members to invest with low minimums.
4. Modern UX with a seamless experience
Having a modern user experience with a seamless design can increase adoption rates and decrease user frustration. However, most incumbent HSA platforms are either built on top of 20-year-old technology or by financial institutions that don’t have strong competency in software design. Look for a vendor that offers a modern UX that is easy to use, with minimal clunky applications for managing investments.
5. Single source of truth for all spending accounts
A single source of truth for all spending accounts makes administration and support much easier. It also reduces training, confusion, and the number of places users need to go. Having all pre-tax benefits (HSAs, FSAs, Commuter, etc.) and LSAs in the same platform gives you more program flexibility, and it provides global workforces with a more equitable approach. Future-proof your spending account technology with a versatile platform that can add, move, or change benefits easily.
6. Modern banking with direct banking connection
Having modern banking features such as a direct banking connection, a card, connections, and non-OEMed tech is crucial when choosing an HSA vendor. These features make it easy to manage and access funds, which can help increase adoption rates. A modern, non-OEM tech stack also ensures fewer back-end issues will break and your provider will be able to address issues on their own.
7. Strong in-app controls
You never want to worry about clawing back excessive contributions or learning that payments were out of compliance. An HSA vendor with strong in-app controls such as reporting, clarity of IRS compliance, and not allowing for over contributions is essential. Strong in-app controls help members stay on top of their finances and ensure compliance with IRS rules and regulations. Control everything up front and you won’t have to worry about it.
8. Good education materials
While great software is essential, members often need to understand the rules of HSAs. A good provider helps clarify everything from eligibility to investment options. Look for an HSA vendor that offers good education materials to ensure members understand the HSA program's benefits and requirements.
9. Expense accruals
HSA funds are typically deposited as payroll deductions over the course of a year. A common challenge arises when a member incurs an expensive cost early in the year. The software should be able to manage accrual reimbursements for that expense over time as funds come in without forcing the member to stage multiple claims or wait to submit a receipt.
10. Seamless account creation and Customer Identification Process
It is essential to have robust capabilities for creating and transferring accounts with as much automation as is legally permissible. One area that causes a lot of pain is complying with the Patriot Act’s customer identification process (CIP) requirement. The rule requires a bank to obtain a taxpayer identification number from the customer before opening an account and will sometimes flag certain individuals to provide additional documentation. Look for a vendor that uses a robust CIP process to prevent fraudulent activity, protect member data, and easily comply with federal requirements.
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