Health savings accounts (HSAs) have been getting slowly increasing amounts of press as a means to grow assets to pay for health care in retirement in a triple-tax-advantaged account.

Now the launch of a new HSA from health savings custodian HealthEquity, Inc. could push it farther along that path.

HSA owners seldom even max out their contributions to such accounts, despite the benefits. Being able to stash money in an HSA allows accountholders to get a tax break when funds are deposited, during the life of the account and when they withdraw the money.

In addition, if they take advantage of the investment option built into some HSAs, they can grow contributions into a sizeable balance that will help them pay for health care expenses in retirement—since HSAs don’t have an “expiration date” of the sort that flexible spending accounts (FSAs) do and built-up balances just roll over from year to year (ideally growing in size as they roll).

The new HealthEquity HSA, Index Investor HSA, is a health savings account for the Vanguard community that takes advantage of the cost efficiency of the institutional share class for individual investors.

The Index Investor HSA features 16 Vanguard funds covering 10 asset classes. There are no minimum investment requirements or trading fees. It has the lowest average operating expense ratio and lowest HSA administration fees for an all-Vanguard HSA fund lineup.

Other features include free electronic funds transfers, free bill payment, free debit card, online member portal and mobile apps, and live support from HealthEquity’s team of health savings advisors, available to members 24/7.

The company also said that for a limited time, new HealthEquity members receive free first-year administration with the rollover or transfer of at least $1,000 from another HSA custodian within 90 days of opening an Index Investor account.

Instant Insights /

New HSA product moves accounts closer to asset-building product

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