Lively HSA Review - Choose Your Own HSA Provider

Did you know you don't have to use the HSA Provider your company has selected? That's right, you can choose the option you feel is best for you, and which may have less fees and better features. Of course if you receive any additional benefits like an initial deposit from your employer, it may be easier to use the HSA Provider they work with. However every dollar you deposit afterwards can instead go towards an HSA Provider of your choosing

Lively is one such option you can choose from. Lively is an HSA Provider which allows you to save and invest in your HSA Account outside of what your employer may or may not provide. For the investment side of the HSA, Lively works with TD Ameritrade, the most popular trading platform available which now also has free stock trading

How Does It Work?

Transfer cash via employer contributions, ie direct deposit, or through transfers directly from your bank account. You can also transfer funds from another HSA provider to Lively via trustee to trustee transfer. This may be a good option if the HSA provider you have, or use through your employer, has high fees. There's no charge to transfer!

​Features:
One of the options which stands out to me is the ability to add expenses for reimbursement now or at a later time! This is excellent for those who may want to pay out of pocket now, and reimburse themselves later after their HSA funds have had years to compound via their investments! This is a favorite strategy of followers of the Financial Independence Retire Early Community. Instead of using your tax free HSA deposits right now to pay for a $500 expense, as an example, you could allow the $500 to grow via a Total Stock Market Index Fund. Over the course of 30 years, your $500 compounded at an average rate of 8% could turn into $5,510! This is still tax free money, as long as you use it to pay for HSA approved expenses. This means instead of having $500 go away immediately, you can have it grow 10X and reimburse yourself the $500 in the future tax free! Lively gives you an easy option to save your receipts. You may want to keep your own digital backups just in case, but this is a great option.

In addition, when you're older chances are your medical expenses will be higher. So focusing on investing your HSA funds now, will allow you to have more money saved to pay for medical expenses during the time you may need it most.

Minimum Balances:
Lively does not require a minimum balance to open the account. This includes the Savings Account as well as the Investment Account with TD Ameritrade. My employer uses HSA Bank as their HSA Provider, and in order to get started with the investment account which also uses TD Ameritrade, you have to first have a minimum of $1,000 in the Savings Account via HSA Bank. Lively does not have this minimum restriction! You can start your investment account as soon as you open your Lively HSA Account. I'm not sure if this is a requirement of the employer or of HSA Bank specifically. However I do know that if you use HSA Bank outside of your employer, they charge $2.50 per month fee if your cash balance is under $3,000. This means your employer may or may not take up this fee, or HSA Bank may waive the fee for your employer. Either way I am not currently charged this fee with HSA Bank, even though my cash balance is typically under $200 or less.

Fees:
None! It's funny because you know on most sites they may say none, but then you click the option to see full list of fees, and there are fees somewhere...Lively really has ZERO fees!

Debit Card

You will receive a Lively branded VISA Debit Card, so you can make qualified medical expense payments wherever VISA is accepted. Up to 3 Debit Cards are provided at no charge, so your Spouse and or Kids can also have a card of their own to make payments on their own. However if you are following the advice of the F.I.R.E. Community, you are paying medical expenses out of pocket now with your cash back or travel rewards credit card, and reimbursing yourself in the future once your HSA funds have grown over decades of time.

Interest Rates:

• Less than $2,500 = .25%
• $2500-$4999 = .35%
• $5000-$14999 = .45%
• $15000+ = .60%

This is another reason you should invest your HSA funds instead of keeping them in Savings. Interest rates are low in comparison to typical Online Savings Accounts, but still higher than the majority of the large traditional brick and mortar banks. The true value in your HSA is from the triple tax advantage, and the options to invest your HSA funds just like an IRA or 401K to prepare for retirement.

Investment Platform

At my place of work, there is a minimum cash balance of $1000 before you're able to select investment options with TD Ameritrade. Once you reach $1K you can setup the investment options, and then there's no minimum balance you have to maintain after this. So you can take the whole $1K and put it into TD Ameritrade once eligible if you choose. However with Lively there are no minimum cash balances required in order to access the investment options. Lively uses TD Ameritrade for your investment funds. You can setup automatic recurring transfers from your lively account to TD Ameritrade, and you can use all of the features TD Ameritrade has to offer! This means hundreds of fee free ETF's, no trading fees on individual stock/bond/ETF purchases since October of 2019! No word yet on the integration with Charles Schwab since the acquisition, but there may be potential increases in features due to it.
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Overall Lively seems to be a great option as the HSA Provider for your HSA Account, and TD Ameritrade is one of the best investment platforms around. This combination makes it a great option to use for your Health Savings Account funds. ​