Employer-provided HSA plans don’t always have the best options. Some may not allow you to invest your HSA funds or may not provide a debit card for convenient spending. Still, others may come with high fees. Plus, once you leave your employer, you need to do something with that HSA plan!
To get the best options in an HSA plan, you might have to look elsewhere. If you want investing options, a debit card, virtually no fees, and simple HSA management, Starship HSA may be what you’re looking for. The only fee they charge is for investing and even that fee is reasonable.
Starship (Brighter Financial Inc.) is a no-fee HSA administrator. Its CEO and Co-Founder is Sean Engelking. The company was started in 2016 and is based in the New York City area. It raised $7 million in investments during its Series A funding round.
“We’ve acquired more customers during the pandemic than in our company’s existence,” Engelking said in a phone interview with MedCityNews. “Roughly half of the country no longer gets benefits from a traditional employer as we know it. That group is growing.”
Starship offers a simple way to manage your HSA account without all of the fees. For gig economy workers, it makes managing their HSA especially easy since Starship makes it easy to self-fund as well as receive contributions from multiple employers..
Rather than multiple HSA accounts scattered across several employers, gig economy workers only need to manage one account. “We are seeing the shift from the employer to individuals,” said Engelking in the interview mentioned above. “There’s a big shift in labor happening in slow motion.”
HSA stands for a health savings account. It is meant to help offset some of the high costs associated with a high-deductible health plan, which is the only plan an HSA can be used with.
Money that goes into an HSA is tax-free and comes directly out of your paycheck, like retirement money. However, you don’t have to use your employer’s HSA plan. If you find an HSA with better features or fewer fees, you can have the same tax-free dollars redirected to the new plan.
Money that is spent on qualifying medical expenses is tax-free dollars. In case your employer can’t work with a specific plan, you can always contribute after-tax dollars and claim them on your tax return.
HSAs have improved over the years. They’ve gone from simple savings accounts to plans that offer investment options and debit cards, making it easy to spend money from the account.
Minimal Fees
Besides a $1 per month fee for investing (0.35% for balances over $5,000), you won’t be charged any of the following fees from Starship HSA:
- No monthly maintenance fees
- No withdrawal fees
- No minimum balance fees
- No transaction fees (within the U.S.)
- No debit card fees
- No overdraft fees
- No account opening fees
- No account closing fees
Savings
Starship lets you save money in the Starship Spending Account or invest it. You can also save a portion of your funds and invest the rest. For savings balances of $2,000 and above, you’ll earn a 0.05% APY.
Investing
Unlike other HSA providers, you don’t have to reach any account balance with Starship before you can start investing. If you want, you can invest every penny of your HSA funds (and from the first dollar).
Starship uses automated or Robo-advisor investing. However, you can’t select individual stocks or other equities in your investment account. After answering a few questions about your risk tolerance, Starship will suggest one of three portfolios.
- Conservative — less risk but lowest return
- Balanced — average risk and higher return than conservative
- Growth — riskiest but the most return potential
After choosing a portfolio, your funds will be invested. There is nothing else that you need to do. You can also set an auto-invest amount. With auto-invest, once your spending account exceeds the current “Overflow” or automatic threshold, funds will automatically roll over into your investment account.
Know that there is a $1/mo fee for balances under $5,000. And there’s an additional fee of 0.35% of AUM/mo for balances of $5,000 or more.
Customer Service
One of the few downsides of Starship is that it doesn’t have a publicly-listed phone number. However, they do have live chat available Monday – Friday from 6 am – 6 pm PST. You can also email them at [email protected].
Are There Any Fees?
There are no monthly fees whatsoever for non-invested accounts. But if you decide to invest some of your funds, you’ll pay $1 per month for balances below $5,000 and an additional 0.35% per month for balances of $5,000 or more.
How Do I Open An Account?
You can visit https://www.starshiphsa.com to open an account. You’ll need to download Starship HSA’s mobile app to manage your account moving forward as there is only limited functionality through the website. The mobile app is available for Android and iOS devices.
Is My Money Safe?
Yes, Starship uses encryption on its website and your funds are FDIC-insured up to $250,000. Any invested funds are SIPC-insured. Note that Starship HSA is not a bank or a broker. Banking services are provided by NBKC Bank and DriveWealth provides its brokerage services. You can lose money in an investment account.
Is It Worth It?
Yes, Starship checks most of the boxes that HSA savers will be looking for. It’s a mobile-first HSA provider that charges virtually no fees except for a small amount for investing. You’ll also need to be content with Robo-advisor investing, but for most people, that will probably be just fine.
If you prefer more DIY investment choices, though, you may want to choose a different HSA provider. Lively HSA could be a strong alternative as it also charges no monthly fees and has robust investment options through TD Ameritrade. And, for more options, you can compare Starship HSA with all our favorite HSA account providers
Summary
Starship is an HSA account provider that charges no monthly fees on cash accounts and allows members to invest 100% of their funds.
PROS
- No monthly fees for non-invested accounts
- No minimum balance for investing
- Cash savings earn up to 0.25% APY
- Self-employed plans offered
CONS
- There are fees to invest within your HSA
- No customer service number
- Limited investment options (Robo-advisor portfolios only)
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