Q: I am a federal employee. I have an HDHP (family plan) with an HSA through a FEHB insurer. The HSA cash account is getting funded to the extent that I would like to exercise some investment options. However, the investment options with the HSA trustee are load funds with high expenses that don’t have the greatest track record. Can I set up a separate HSA with another fund family and transfer funds from the cash account to the separate HSA? Or am I stuck with the investment options selected by the FEHP insurer? The insurer is Aetna and the HSA fund investment options are through JP Morgan Funds.
A: Yes, and this is probably a smart move if you can find another trustee with better investment options. In addition to transferring existing funds from the health plan’s trustee, you can make voluntary contributions directly to the second trustee. You might have, or want, to reduce your payroll allotment to the FEHB HSA account and make up the difference through direct contributions to the second HSA account.