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Lively HSA Review: Top Rated Health Savings Account Provider

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In a similar nature to putting money away for your college education or retirement, health is a crucial area of our lives that we must ensure we are financially secure in.

As such, if you’re not currently in possession of a Health Savings Account (HSA), we would suggest making this a key priority at the earliest possible opportunity. In doing so, you’ll be in the best position possible to prepare for the worst – especially in your later years.

With that being said, the likes of Lively is offering HSAs that come with no fees if you’re contributing as an individual – with the option of having your funds invested with TD Ameritrade to increase the rate at which your savings grow. Moreover, if you’re a small-to-medium business that is looking to contribute to your employee’s HSA, you can do so with at a monthly cost of just $2.95 per individual.

If you’re interested to find out more about what the platform offers, then be sure to read our comprehensive Lively HSA review.

Within it, we’ll cover the ins and outs of what Lively offers, who is eligible, how much you can pay in, what fees you need to consider, and how much your money is likely to grow by.

Let’s start by getting a snapshot of what Lively actually is.

Visit Lively

What is Lively?

Based in San Francisco, California – Lively is a relatively new online start-up that offers cost-effective Health Savings Accounts (HSAs) for everyday Americans.

As we will discuss in more detail further down, one of the overarching selling points to Lively HSAs is that they do not charge any fees to make contributions – which is in stark constant to many of its industry counterparts.

Instead, the platform only charges a fee if you’re an employer and looking to contribute funds to your employee’s HSA. This in itself only comes out at $2.95 per month, per employee – which again, is super competitive.

On top of offering an industry-leading pricing structure, Lively is also gaining in popularity with US considers for the ease at which the HSA can be managed. Through a one-stop online portal, members can seamlessly make contributions at the click of a button. You can do this by linking your checking account up with Lively – which not only covers fee-free transfers, but there is no minimum contribution amount – ever.

Lively Website

Once your funds are planted into your Lively HSA, you will have the option of using the savings to invest in a TD Ameritrade Self-Directed Brokerage Account.

Although this does of course with its own risks, this allows you to grow your money in-line with the wider US economy.

  • For example, you could place your HSA funds into a stock market index such as the S&P 500, which over the course of time, has averaged annualized returns of 10%.
  • In even better news, your Lively HSA will also come with a full-fledged debit card. This is for the purpose of paying for low-level medical services – such as visiting your doctor’s office or paying for medicine at a pharmacy.
  • In doing so, you’ll still benefit from the tax-free advantages that HSAs typically come with.

Finally, it is important to note that your Lively HSA is protected by the Federal Deposit Insurance Corporation scheme – subsequently ensuring that your money is protected by up to the first $250,000. As such, although Lively is still in its infancy, you should have no concerns about the integrity of the platform – nor the safety of your funds.

So now that you have an understanding of what Lively actually is, in the next section of our review we are going to explore who is eligible for one of its HSAs.

Am I Eligible for a Lively HSA?

Although Lively is potentially suitable for millions of Americans from all walks of life, not everyone will be eligible. As such, we have outlined some of the key requirements that you will need to meet in order to become a member.

Lively also has a simple eligibility check on their homepage you can use.

Am I Eligible

In Possession of a High Deductible Health Plan

First and foremost, you will need to ensure that you are already in possession of a High Deductible Health Plan. If you’re somewhat unsure of what this entails – let us explain.

In a nutshell, a High Deductible Health Plan is a health insurance plan that installs a minimum deductible amount for expenses. The specific amounts are usually updated on an annual basis, with 2019 and 2020 set at $1,350 and $1,400 for individuals, respectively.

While the specifics will vary from plan-to-plan – let’s say that you need to claim $2,400 on medical expenses in 2020. As your plan has a deducted minimum of $1,400 – this means that you will be required to pay for the first $1,400, with the High-Deductible Health Plan provider contributing the rest.

As noted by the Lively platform itself,  this means “no copays or coinsurance before your deductible is met.”

Not Currently Holding a Non-HSA Qualified Health Insurance Plan.

If you’re currently holding a non-HSA qualified health insurance plan with another provider, you won’t be eligible for a Lively HSA.

Medicare and Medicaid

Finally, if you’re currently enrolled in Medicare or Medicaid, then you won’t be able to proceed with a Lively HSA application.

How Much can I Contribute to my Lively HSA?

Firstly – and as we’ll cover in more detail shortly, all of the money that you put into your Lively HSA will be shielded from tax. This includes withdrawals too – as long as the funds are utilized on eligible health expenses. However, as these tax-efficient savings are a government initiative, they will come with certain limits.

Irrespective of the HSA provider that you go with, your annual limits will remain constant across the board.

  • In 2019, the government set these limits at $3,500 for individuals, rising to just $3,550 in 2020.
  • If you’re looking to contribute as a family, then this increases to $7,000 and $7,100 for 2019 and 2020, respectively.
  • Finally, if you’re aged 55 or more, then you will be able to utilize a catch-up contribution of $1,000 annually.

Based on the above figures, if you’re simply an individual looking to maximum the tax-efficient savings that a Lively HSA yields, then you would need to contribute just over $291 per month. On the other hand, you’ll likely reduce this figure if your employee also makes a contribution to your HSA.

Lively Dashboard
The Lively Dashboard

How Much Will my Lively HSA Grow by?

On top of having the capacity to avoid tax on your HSA funds up to your permitted annual limits, you will also stand the chance to see your money grow. In this respect – you have two options – the Lively HSA interest-bearing account, or investing your savings in the financial markets via TD Ameritrade.

Here’s the lowdown on the two options.

Interest-Bearing Account

When you first get your Lively HSA set-up and begin making contributions, you will automatically be enrolled onto its interest-bearing account. This option is best suited if you do not have an appetite for the risks that come with the financial markets. On the other hand, the amount of interest that you will earn on your money is nothing-but minute.

  • For example, savings of between $0 and $2,499 pays just 0.25% annually, and the $2,500 to $4,999 band stands at just 0.3%.
  • If you’re holding between $5,000 and $14,999, the interest amounts to 0.35%.
  • Finally, the highest rate available on your Lively HSA account is 0.6% annually, which is based on holdings of $15,000 or more.

In our view, leaving your funds in the interest-bearing account is somewhat problematic when you factor in the rising growth of inflation. For example, it is estimated that the domestic inflation rate stood at 1.8% in 2018. While you also need to factor in the tax-efficient savings that you will make when you eventually begin utilizing your Lively HSA for medical expenses, your savings are potentially being watered-down each and every year by the rising cost of living.

On the flip side, your money is always 100% safe when leaving it in the default interest-bearing account, up to the first $250,000 as per your FDIC protection. As such, you need to assess what’s more important to you – growth, or immunity from the ups and downs of the financial markets.

TD Ameritrade Investment Account

If you’re instead looking to see your money grow at a much faster rate, then the other option at your disposal is to sign up for the TD Ameritrade investment account.

TD Ameritrade is one of the largest and most established investment brokers in the US, with the platform offering thousands of asset classes such as stocks and shares, ETFs, mutual funds, and more.

Lively Investments

If you do opt for the investment account, then it is important to note that this is structured as a ‘self-directed brokerage account’. In layman terms, this means that you will be responsible for making your own investments. However, this isn’t to say that you need any experience of how the financial markets operate, as you can simply invest in a diversified, low-risk index fund that tracks the wider economy.

Crucially, you will still benefit from tax-efficient savings when you invest in a fund via TD Ameritrade – up to your annual contribution limits.

On the flip side, going the investment account route does, of course, come with its risks. While the stock markets will always have its ups and downs, investors holding onto their portfolio’s long-term are typically rewarded. However, this can never be guaranteed, so do consider the risks.

How to get Started with Lively

Here’s a quickfire step-by-step guide on how you can get started with Lively today!

  • Step 1: Visit the Lively homepage and click on the ‘OPEN ACCOUNT’ button.
  • Step 2: Fill out the application form, which will require you to enter details about your who you are, what HSA accounts you currently have, and what contributions you are looking to make.
  • Step 3: Lively will then require 1-2 business days to verify your account. Once they do, you’ll be able to log in to your account and make your first contribution.
  • Step 4: If you want to set-up your investment account with TD Ameritrade, follow the on-screen instructions by clicking on ‘GET STARTED’.
  • Step 5: Once your TD Ameritrade account has been linked, you will then need to transfer your funds from Lively over to the broker, before proceeding to select your investment.

Lively Signup

Lively HSA Debit Card

As we briefly noted earlier, one of the best features offered to Lively members is that you will be offered a dedicated debit card.

The card will be posted to your registered addresses within 7-10 days of opening the account. Once it does arrive, you’ll need to activate the card via your Lively account portal.

Lively Debit Card

Take note, the card is only to be used to cover medical expenses, so ensure that the transaction meets the platform’s eligible usage policy. Moreover, the card won’t work at an ATM, so you’ll be paying for your medical expenses over-the-counter.

  • There are no fees to use your Lively HSA debit card on eligible expenses, which is great.
  • However, the card does come with an initial daily limit of $2,000. As such, if you need to cover a medical bill on the spot that amounts to more than $2,000, you will need to call Lively to explain the situation.
  • In most cases, they should be able to increase the limit so that you are able to cover the bill.

On a side note, you will not be able to use your Lively HSA debit card to cover medical expenses if the funds are held in your TD Ameritrade account. As such, it might be worth keeping a minimum cash balance in your standard interest-bearing account.

Lively HSA Review – The Verdict?

In summary, there is much to like about what Lively and its HSAs offer. In a nutshell, you will have access to a fee-free HSA that comes with a fully-fledged debit card that allows you to pay for low-level medical expenses on the spot.

While you can leave your funds in the platform’s interest-bearing account for a 100% risk-free journey, you also have the option of setting up an investment account via TD Ameritrade.

If you do choose the latter, you’ll stand the chance of growing your money over the course of time, while still benefit from the annual tax-free savings that HSAs yield.

Finally, if you want your employer to start paying into your Lively HSA, they’ll only be charged a mere $2.95 per month, per employee – which is more than reasonable.

Visit Lively

Lively

9

Ease of Use

9.0/10

Fees

9.0/10

Reputation

9.0/10

Customer Support

9.0/10

Design

9.0/10

Pros

  • Fee-Free HSA Provider
  • Good Investment options with TD Ameritrade
  • Simple Signup
  • Excellent Website & App
  • No Minimum Deposit

Cons

  • Requires 2 Accounts for Investing
Kane Pepi

Kane holds a Bachelor's Degree in Accounting and Finance, a Master's Degree in Financial Investigation and he is currently engaged in a Doctorate - researching financial crime in the virtual economy. With a keen passion for research, he currently writes for a variety of publications within the Financial and Cryptocurrency industries. kane@moneycheck.com


Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank or credit card issuer and have not been reviewed, approved or otherwise endorsed by any of these entities.


Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.


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