Robinhood Health Savings Account (HSA)
Highlights:
• Robinhood does not offer a Health Savings Account (HSA) for employees or non-employees.
• Lively does offer HSAs for non-employees, so it's a viable alternative.
Are you in the hunt for a Health Savings Account (HSA)? If so, Robinhood isn't an option because it does not offer HSAs. Lively does, though, and it has some really good features.
Overview of Health Savings Accounts at Robinhood
Robinhood does not offer Health Savings Accounts for employees or non-employees.
Lively as a Fallback
If you do want to open an HSA and not some other account registration, Lively has an answer for you. The company offers Health Savings Accounts (plus a collection of other accounts, including Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs)).
Lively's HSA comes with some really nice benefits. First and foremost is a Visa debit card. This card can be used to pay for medical products and services. There is a daily purchase limit of $5,000. A card can be added to a mobile wallet for even greater convenience. Up to three cards can be connected to a single account.
Another great feature of Lively's HSA is the ability to transfer an HSA from another provider into a Lively account. A full or partial transfer is possible, and Lively also accepts 60-day rollovers. Besides this transfer feature, Lively's software has a deposit tool to set up a one-time or recurring deposit schedule.
Lively's HSA as an Investing Account
Besides using an HSA at Lively for medical expenses, the account can also be used for investing. Both robo and brokerage options are available, so both beginners and experienced traders can grow their accounts over time.
The automated-investing option is made possible through a partnership with Devenir. When an HSA is set up as a robo account, it will be invested in a collection of mutual funds picked by a software program. Examples of funds used in this program include:
- DFA Real Estate Securities (DFREX)
- PIMCO Total Return (PTTRX)
- Vanguard Emerging Markets Stock Index (VEMAX)
Every fund used in the robo program has an expense ratio below 1.00%; some funds are index funds, while others are actively managed. The exact funds and their percent allocations will depend on the risk profile of the account, which itself is determined by answers to an online questionnaire. Once the account begins investing, automatic rebalancing is a standard feature.
More experienced investors may want to consider a self-directed brokerage option. This setup is powered by Charles Schwab; it comes with a large list of asset classes. Besides mutual funds, there are stocks, fixed-income securities, exchange-traded funds, and closed-end funds. Investors who have a financial advisor can fill out a form to grant account access to the advisor.
Eligibility
If everything sounds great to you so far, there's one small hurdle we should point out: eligibility. The U.S. government doesn't permit just anyone to open a Health Savings Account. The following criteria are required to open an HSA:
- Health insurance with a high deductible
- No other health insurance, including Medicare
- Can't be claimed as a dependent on someone else's tax return
- Not have or be eligible for reimbursement under a general-purpose Flexible Spending Account (FSA)
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How to Open an Account
If you meet the legal requirements and want to open an HSA, Lively has a user-friendly online application. The same application can be accessed through the website and mobile app.
At the top of the website, there is a blue button: Open a New Account. Click on this to start the application. On the first page, you'll need to select whether you're an employee or an individual. If you select the former, you'll get a notice telling you to go through your employer to open your HSA. If you specify individual, you'll get the application.
The first few pages will ask various questions to establish eligibility (the same issues noted above). Once you get through these questions, you'll get the application, which requires:
- Date of birth
- Social Security Number (not other tax ID number is accepted)
- Address
The mobile app has the same questions on its application.
Tax Benefits
Once an HSA is up and running, it will be triple-tax-sheltered. This means it offers tax deductions on contributions, tax-free growth, and zero taxes on withdrawals for medical expenses.
Be aware that withdrawals for non-qualified medical expenses are subject to income tax at the account holder's marginal tax rate. Moreover, withdrawals before age 65 for non-qualified medical expenses are subject to an additional 20% penalty. Ouch!
Awards
Fees and Minimums
One of the great things about Lively's HSA service is the pricing. The company charges no recurring fees of any kind; there are no annual, low-balance, or maintenance fees. An account can be opened with zero balance if desired. There is no fee to close a Lively HSA, which is another advantage.
If an HSA elects the brokerage setup through Schwab, there is a $24 annual fee for accounts below $3,000. The robo setup through Devenir costs 0.50% per annum for any balance.
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Updated on 3/17/2025.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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