A simplified experience for increased savings and satisfaction. 

Offering a health savings account (HSA) to participants is a great way to encourage them to start saving for unexpected health costs or health costs incurred during retirement. However, employers who switch HSA custodians can create some unexpected hassles for accountholders if not handled properly. Consolidating HSAs is a great way to create a better accountholder experience, help accountholders save money on fees, and increase their savings potential.

Transfer Options

When it comes to consolidating HSAs, there’s two main ways to go about this transfer. The first type of transfer is a bulk transfer, which occurs when employers migrate their employee’s HSA balances from their former custodian to their new one, without needing to process each employees’ transfer one-by-one. This often occurs when an employer offered an HSA, switched custodians, and wants to continue offering an HSA. When an employer chooses to do a bulk transfer, accountholders choose whether or not they want to participate in transferring to the new custodian. Both the employer and their employees receive many advantages when a bulk transfer is utilized.

An individual transfer is great for an accountholder who is opening up an HSA with their new employer and already had one with a previous employer, or, if employers do not meet the requirements for a bulk transfer. For an individual transfer, accountholders complete a transfer form and submit it to their previous custodian to request for their funds to be transferred to their new employer’s custodian. This is an individual transfer because it’s only being processed for the one person who’s requesting it for their account. Although this article mainly focuses on the other option, bulk transfers, the benefits discussed for accountholders is still applicable if they choose to do an individual transfer.

Accountholder Benefits

When a participant consolidates their HSAs, they receive five key benefits:

1. Simplified account management. Consolidating HSA funds means that participants only need to manage one account and one debit card. This helps an individual simplify their financial situations, by removing the need to track where their funds are, which card pulls from which account, and streamlining transactions, contributions, and investments.
2. No unnecessary monthly fees. Nobody likes paying extra fees. Most individual HSAs, or retail HSAs, charge a monthly administrative fee to keep an HSA open. Consolidating HSAs reduces any unnecessary monthly fees because there are fewer open accounts.
3. Simplified tax reporting. When tax time rolls around, participants will thank themselves for simplifying the process. By consolidating HSA funds, participants receive fewer tax forms and less paperwork annually. This reduces some of the administrative and recordkeeping burdens come tax time.
4. Maximized interest earned. Not all HSA custodians offer the same account types and interest options. For example, EBC’s high-yield interest option gives participants the chance to earn more tax-free interest when they transfer funds to EBC’s HSA custodian and increase their available cash balance.
5. Maximized investment earnings. One of the key aspects of an HSA that makes it unique is the ability to invest. Many HSAs require a minimum balance before they can invest, so consolidating their funds to a single HSA helps participants reach that balance quicker. EBC’s HSA offers a personalized investment experience to participants who have a $1,000 cash balance. Once participants reach that balance, they can start investing and work towards their long-term financial goals.

Employer Benefits

When HSA funds are consolidated, employers receive the following benefits:

1. A better participant HSA experience. Encouraging participants to only have one active HSA, whether they consolidate on their own or utilize a bulk transfer, provides accountholders with a simplified account management experience, reduced fees, and the opportunity to earn more with their HSA. Using a bulk transfer also takes a lot of the administrative transfer work off of the participant if they had to make that request themselves.
2. Streamlined transfer process. Coordinating a bulk transfer helps employers avoid the need for multiple one-off transfer requests, saving their benefits team time and effort. A bulk transfer really is aimed to be a one and done deal that gets all participants transferred over at once.
3. Transfer support. When you choose EBC for a bulk transfer, we provide transfer coordination and support for employers organizing bulk transfers. Employers who choose to organize individual transfers, opposed to bulk transfers, are responsible for working with their previous custodian to coordinate the transfer.

EBC’s HSA Bulk Transfer Information

Our goal is to provide a top-notch benefits experience for employers and their participants alike. Supporting bulk transfers is one way that we aim to make the HSA experience better for everyone. As an important note, EBC requires employers to have 50 or more employees opt-in to the transfer, and the previous custodian also must consent to the bulk transfer process. Employers who are interested in a bulk transfer and meet the requirements should contact their EBC representative to kick off this process or ask any questions they may have.