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Self-Directed Health Savings Account (HSA)

With a self-directed HSA, the HSA holder (you) will have total control over your HSA funds and you will no longer have to get each investment approved by the custodian of your account like in a custodian controlled Self-Directed HSA. Instead, all decisions are truly yours.

What it is

The rising cost of health care plans is forcing a number of employees to embrace so-called high deductible health plans (HDHP). An HDHP is a category of health insurance plans available from most providers.  They have lower monthly premiums and a higher yearly deductible than regular health insurance plans. 

The IRS made the HSA for qualifying taxpayers to receive a tax benefit for medical expenses paid whether you itemize or not. Think of an HSA as a bank account that you can open if you have an HDHP.  You can contribute money to this account; the money can be invested so that it grows and compounds over time tax free.  If you need to pay for a qualified medical expense (QME), you can withdraw money from your HSA, also tax free.

Self-only coverage: $1400 | Family coverage: $2800

Contribution limits

2020: Individuals with single medical coverage can contribute up to $3,550 per year, this is up $50 from 2019. The annual HSA contribution limit is $7,100 (up $100 from 2019) for those covered under qualifying family medical plans. If you are 55 or older in 2020, you can contribute an additional $1,000, or total of $4,550 to an HSA for singles and $8,100 for families per year.

What it offers

There are numerous benefits of HSA plans compared to regular health insurance.  You save money each month because the premiums are lower, and you are still insured against catastrophe.  Your HSA savings account is highly tax advantaged as the funds grow tax-deferred. The HSA can also be used for medical expenses, emergencies, job loss, or retirement. These are some of the main benefits of establishing an HSA:

  • Ability to claim a deduction for contributions you make that are not pre-tax or made by your employer even if you don’t itemize your deductions on Schedule A.
  • Never taxed when used for qualified medical expenses.
  • Contributions made on your behalf by your employer, including any pre-tax contributions you make through a cafeteria plan, are generally not taxable.
  • You can contribute up to the tax filing deadline for the year. For most people, that is April 15 of the next year.
  • Unused contributions remain in your account from year to year
  • Interest, income, and gains earned on the account is usually tax free
  • Distributions used to pay for qualified medical expenses are tax free.
  • Your account stays with you even if you leave your employer

Our Products

1 | Checkbook Control Self-Directed HSA

The self-directed HSA LLC with “checkbook control”  also known as a checkbook HSA has quickly become the most popular vehicle for investors looking to make alternative assets investments, such as rental real estate that require a high frequency of transactions.

Under the checkbook HSA format, a limited liability company (“LLC”) is created which is funded and owned by the HSA and managed by the HSA holder. The “checkbook control” self-directed HSA allows one to eliminate certain costs and delays often associated with using a full -service HSA custodian.  The checkbook HSA LLC structure allows the investor to act quickly when the right investment opportunity presents itself cost effectively and without delay.

A “checkbook control” self-directed HSA LLC is popular with retirement investors seeking to invest in alternative assets, such as rental properties, fix and flips, tax liens, or cryptocurrencies that require a high frequency of transactions.

2 | Custodian-Controlled Self-Directed HSA

A custodian controlled self-directed HSA offers an HSA investor more investment options than a financial institution. With a custodian controlled self-directed HSA, a special HSA custodian will serve as the custodian of the self-directed HSA. Unlike a typical financial institution, most self-directed HSA custodians generate fees simply by opening and maintaining HSA accounts and do not offer any financial investment products or platforms. With a custodian controlled self-directed HSA, the HSA funds are generally held with the HSA custodian and at the HSA holder’s sole direction, the HSA custodian will then invest the HSA funds into traditional as well as alternative asset investments, such as real estate.

A custodian controlled self-directed HSA is popular with retirement investors looking to invest in alternative assets which do not involve a high frequency of transactions, such as the purchase of raw land or private fund investments.

Checkbook Controlled

$360 annual IRA custodian fee

  • One low flat fee
  • No ongoing transaction fees
  • No account value fees
  • Fee is deducted from your account upon set-up
  • Fee is deducted in quarterly installments of $90 beginning the following calendar year

Custodian Controlled

$360 annual IRA custodian fee

  • Quick and Cost Effective Custodial Services
  • No account value fees
  • Fee is deducted from your account upon set-up
  • Fee is deducted in quarterly installments of $90 beginning the following calendar year


All our Self-Directed IRA clients benefit from a flat annual IRA custodial fee, irrespective of account value. This is because we want all our clients to accurately report the value of their IRA accounts without being concerned that they might pay higher account value fees.

HSAs: Important Terms

High-Deductible Plan

A High Deductible Health Plan (HDHP) is a category of health insurance plans available from your health insurance provider.  They have lower monthly premiums and a higher yearly deductible than regular health insurance plans. An HDHP has a higher deductible than most health plans, and a maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you pay. You can set up a self-only (one person) or a family (more than one person) coverage plan.


The concept of tax deferral is premised on the notion that that all income and gains generated by the pre-tax retirement account investment would generally flow back into the retirement account tax-free. Instead of paying tax on the returns of a self-directed HSA investment, such as real estate, tax is paid only at a later date, leaving the investment to grow unhindered.

Self-Only vs. Family Coverage

If you are married and either you or your spouse has a family HDHP, then both of you have family coverage. This is true even if one of you has a family plan and the other one has a self-only plan. Each of you can have an HSA. This means that together you can contribute up to the family limit. However, one cannot each contribute up to the family limit.

  • If you each have a self-only plan, then you can each contribute up to the self-only limit to your respective HSA.
  • If you have a family plan with a deductible for each person you can still contribute only up to the family limit. For example, you have a $6,000 deductible for each person. You and your spouse are on the plan. The contribution limit for the two of you is the family limit for the year. Between the two of you, you can contribute up to that amount.

The Internal Revenue Code does not describe what a Self-Directed HSA can invest in, only what it cannot invest in. Internal Revenue Code Sections 408 & 4975 prohibits Disqualified Persons from engaging in certain type of transactions. The purpose of these rules is to encourage the use of retirement accounts for accumulation of retirement savings and to prohibit those in control of retirement accounts from taking advantage of the tax benefits for their personal account. 

In general, so long as one does not use the HSA funds to buy life insurance, collectibles, or engage in any transaction that directly or indirectly involves or benefits a disqualified person, the transaction will not violate the IRS prohibited transaction rules.

Our Services

The IRA Financial Advantage

The self-directed retirement experts at IRA Financial Trust will help you establish your self-directed HSA or “checkbook control” HSA quickly and easily.   Once your new Self-Directed HSA account has been established with IRA Financial Trust, we will assist you in rolling over your current retirement funds or make HSA contributions to your account. All rollover and HSA contributions will be held with Capital One Bank, where you will receive FDIC protection of up to $250,000 of cash before the funds are invested in alternative assets at the client’s direction.

What We Offer

    One low annual fee
  • No annual account asset fees
  • We handle all IRS reporting & administration
  • Invest in what you know and understand
  • Generate tax deferred growth in your HSA investments
  • Help diversify your retirement portfolio
  • Specialized in “checkbook control” self-directed HSA solutions
  • Expertise in cryptocurrency and ICO investments