How to move an employer HSA to Fidelity without tripping over the common stuff
If you have an employer HSA with fees or bad investment options, you may be able to move some or all of it to Fidelity.
The clean way is to open a Fidelity HSA and start the transfer from Fidelity’s side. That’s a trustee to trustee transfer, so it does not count against your annual HSA contribution limit.
Before doing anything, check two things at your current provider:
Whether they charge a transfer/closure fee.
Whether they support in-kind transfers.
If they support in-kind transfers, your holdings may be able to move without selling. If they don’t, you’ll usually need to liquidate to cash first. Fidelity notes that many HSA providers only transfer cash.
One easy mistake: if you have automatic investing turned on, turn it off before selling to cash. Otherwise the provider may reinvest the cash before the transfer finishes, and you get to do the whole annoying loop again.
Timeline is not instant. Fidelity says HSA transfers usually take 2-5 weeks depending on how quickly the current provider responds.
Once the money lands, invest according to your own plan. A lot of people use broad index funds like FZROX, FSKAX, FXAIX, or similar. Just don’t confuse them: FZROX is the zero expense ratio total market fund while FXAIX is a very low cost S&P 500 fund, but not zero expense.
Why bother? Some employer HSAs have monthly fees, cash minimums, or limited investment menus. Fidelity’s individual HSA has no account fees or minimums, though fund expense ratios and specific investment costs can still apply.
After the move, the long term strategy many people use is: pay current medical expenses out of pocket if cash flow allows, save itemized receipts, and let the HSA stay invested. At 8% annual growth, $1,000 left invested from 35 to 65 becomes about $10k before taxes/fees/inflation assumptions. Not advice, just the checklist I wish I had before moving mine.
Thanks for the long read..