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My employer provides a High-deductible health plan with HSA option. One thing I was surprised by was how many fees were associated with the HSA account offered through my employer (the HSA is administered by Chase). Am I free to pick my own HSA bank? Or am I tied to my employer provided HSA bank?
My company does not provide any employer contribution to the HSA, in case that's relevant.
HSA accounts come with various rules intended to ensure that the pre-tax money you have opted to put into your HSA account is indeed used for appropriate purposes. Most employers don't handle these accounts in-house but contract with a company or bank who offers to take care of the details and the necessary accounting: the money is simply sent to the bank, and it is the bank that is responsible for ensuring that the money is indeed used appropriately. Now, if you say that you want Wells Fargo (to pick another bank as an example) to handle your HSA account, the employer will likely need to have a contract with Wells Fargo too, and Wells Fargo will charge you fees to handle the account also. Whether you will be any happier with Wells Fargo's fees for a one-off HSA account versus Chase's fees where a (smaller) bulk rate might be charged is something that you should find out before approaching your employer with a request to have Wells Fargo handle your HSA account.
Note that even if you are limited to the HSAs your employer provides, you can still set up your own HSA with whatever trustee you want and periodically transfer the funds from your employer sponsored HSA to your own HSA: according to IRS pub 969 "Contributions to an HSA" section:
Rollovers
A rollover contribution is not included in your income, is not deductible, and does not reduce your contribution limit.
Archer MSAs and other HSAs. You can roll over amounts from Archer MSAs and other HSAs into an HSA. You do not have to be an eligible individual to make a rollover contribution from your existing HSA to a new HSA. Rollover contributions do not need to be in cash. Rollovers are not subject to the annual contribution limits. You must roll over the amount within 60 days after the date of receipt. You can make only one rollover contribution to an HSA during a 1-year period.
Note.
If you instruct the trustee of your HSA to transfer funds directly to the trustee of another HSA, the transfer is not considered a rollover. There is no limit on the number of these transfers. Do not include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889.
(italics mine)
There may be minimums, opening, closing costs, etc. or whatever depending on each plan, but that's not limited by the IRS.
So if you transfer the money yourself, you can only do it once per year, but there are no limits to when or how many times you can instruct the old HSA trustee to transfer funds directly to the new trustee. I also talked to the IRS today and they confirmed that you can have multiple HSA accounts as long as your total contributions don't exceed the yearly maximum (and from the quote above, transfers don't count as contributions).
