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Plan changing HSA custodians


spiritrider
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Is a cafeteria plan responsible for the costs of changing HSA custodians or can it force the burden on the participants?

While the HSA accounts are opened and owned by the participants, the plan selects the designated financial institution where the employer contributions (including employee payroll deductions) are deposited. The plan has sole discretion in selecting this institution and any change to other institutions

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what costs are you describing?  The only HSA participant fees I have ever encountered are a small monthly account fee of $0-2 per participant that is charged to the participant's HSA account as long as there is a balance.

At my company we have stayed with the same provider and have never been charged any entry/change fee but my employees do pay a very small monthly fee for the account.  My husband's companies (on this third employer in 3 months due to buyouts and sales of divisions) have never charged any type of  change fee to the employee and we have gone from HSABank to Wells Fargo to Optum and others in between years. 

I would have to ask it "change fees" are normal and reasonable plan expenses especially if the employer is changing regularly and the employee has no say in the matter of who the HSA account is with and whether they want to change.

(I liken this to 401k providers where the plan sponsor should be reviewing reasonable and necessary expenses but again I have never seen a plan sponsor charge back transition fees/cost to the participants)

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just still brainstorming a bit... Is there any reason the participant can't leave the money in the old account as it is perfectly legal to have more than one HSA account (subject to annual contribution limits) if they don't want to pay the $20 to combine their HSA accounts?  And the participant owns the account not the employer. 

However, if the employer had been paying the monthly fee, it might be that the employee would now get charged that out of their account.  Then the participant can put in personal funds (But not through payroll pretax) or  use the account down to a $0 and then it will get closed.   (btdt as my DH seems to change jobs/employers and benefits often and there have been times where we have had multiple HSA accounts)

The new employer/payroll contributions would go to the new HSA account.  Just as if a new employee had an old HSA with another employer and then got a new one from a new employer.

I don't see how the employer can require the transfer but can see how they can switch providers and open a new account.  Then the employee can chose how they deal with multiple HSAs

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