After adding a $24 wire transfer fee to its HSA (see previous post Elements Financial HSA Still The Best Despite New Wire Transfer Fee), Elements Financial, formerly Eli Lilly Federal Credit Union (Elfcu), decided to add a $3 monthly fee effective in July 2014 if the average daily balance on the savings account side is below $2,500.
I received this out-reach e-mail from Elements via my contact form on the blog:
Dear Finance Buff:
Elfcu has been somewhat surprised by the strong social media response to our Health Savings Account offer. There have been many individuals, like yourself, who have opened HSA accounts with us. With no other product engagement, it is cost prohibitive for us to offer the HSA as originally priced for these one-off relationships.
Elfcu is a Select Employee Group (SEG) Credit Union. Most of our member relationships begin through their place of work…ie the SEG. As healthcare and insurance plans have changed, many of those SEGs are now challenged with providing their employees – our members – a good HSA process and account structure. We developed our program and initial pricing model to meet these needs of our SEG partners. In addition to the HSA accounts, many of these SEG employees/members conduct other business with Elfcu, thus offsetting the costs of the HSA process.
The $24 wire fee on our Health Savings Account falls within our account disclosures and fee schedule, and it aligns with industry pricing for wire fees. While previously Elfcu was waiving this fee for our HSA accountholders, we’ve recently reviewed the product and its pricing structure and have elected to implement this change and charge the existing fee. We opt for a wire transfer versus an ACH transfer for efficiency in proper tax reporting procedures.
We’d also like to provide you with advance notice of a $3 monthly account maintenance fee we will implement July 1, 2014 on accounts that fall below a $2,500 average daily balance in the savings portion– not the investments portion – of the Elfcu HSA.
We do appreciate your referrals. Please note that we offer a range of best of industry products including mortgages and auto loans, and we hope you will explore these options further. Please let us know what we can do to earn more of your business, and thank you for choosing Elfcu.
I’m sympathetic to their position. I feel sorry for bringing them too much business they weren’t prepared for. In the future I will send gems like this only to e-mail subscribers.
I’m not against a monthly fee for low balance in the savings account. However, the choice of using wire transfers to move money to the investment side is still quite odd to me. Other banks and credit unions also have an investment program for their HSA through a third party. I don’t think they are all doing a wire every time someone wants to move $200 to investments.
Somehow those other banks and credit unions figured out how to deal with “efficiency in proper tax reporting procedures.” I challenge Elements to work out the efficiency without resorting to costly wire transfers.
I will keep my HSA with Elements but move $2,500 back to the savings account. It’s still better than HSA Bank unless you are transferring to the investing side more frequently than once a year. If you do only one trade per year, also consider Saturna Brokerage HSA.
[Photo credit: Flickr user Ron Cogswell]