Establishing your health savings account is a two-step process. Once your HSA-compatible insurance policy has been issued, you can set up your health savings account. You are free to choose any insurance company, bank or other financial institution that offers HSAs to manage your account. No insurance company can require you to place the health savings account with them as a condition of insuring you.

Several insurance carriers offer health savings account management as a convenience to their insureds. There are some advantages to putting your HSA funds with your insurance carrier:

1. Convenience –
   a. Regular account deposits can be made on a monthly basis along with your premium payments
   b. Your medical expenses can be paid directly out of your account by the insurance company – just like a claim payment
    
2. Cost –
   a. Some companies do not charge account set-up or maintenance fees if you have your insurance policy with them.

Insurance companies, however, usually offer very low interest rates and few, if any, investment options.

The other choice is to establish your account with a bank or financial institution. While there will be fees involved with this approach, the interest rates and investment options will generally be more attractive. Most financial institutions also allow you to open a brokerage account so you can invest in stocks, bonds and mutual funds. Over the years, the value of investing your HSA funds in the market can be substantial although, as with any investment, there is associated risk.

We recommend that you consider HSA Bank for your account. Full details are available on their website: www.hsabank.com.