Is there trouble ahead? In the interest of helping “policymakers navigate the HSA landscape” with the recent introduction of bills to increase health savings account contribution limits, Morningstar published a new study assessing plans from 10 of the largest plan providers.
Morningstar said it evaluated the plans through two different lenses: “as an investment vehicle to save for future medical expenses and as a spending vehicle to cover current medical costs.”
Despite all the excitement currently surrounding the investment vehicle, results show there’s room for improvement across the board, according to the Chicago-based research and investing behemoth; Morningstar positively assessed only four of the 10 plans as an investment vehicle and three of the plans for use as a spending vehicle.
Moreover, only one plan received a positive assessment on both fronts.
Morningstar assigned each plan an overall assessment of positive, neutral, and negative. For account holders looking to invest their HSA assets, the study analyzed the quality and cost of mutual funds offered as part of the plan’s “investment menu.”
The evaluation of HSAs as a spending vehicle focused primarily on the maintenance fees charged by each plan.
The 10 plans evaluated were Alliant Credit Union, Bank of America, BenefitWallet, HealthEquity, HealthSavings Administrators, HSA Bank, Optum Bank, SelectAccount, The HSA Authority, and UMB Bank.
“Participants using HSAs to invest and save for future medical expenses should seek plans that offer a well-designed investment menu of cheap, high-quality funds,” Leo Acheson, Morningstar’s lead research analyst for health savings accounts, said in a statement. “Plans from four providers—Bank of America, Health Equity, Optum, and The HSA Authority—came closest to attaining that high standard.”
“Now that the U.S. House of Representatives and Senate have introduced health care reform bills that would double HSA contribution limits, analysis of HSA plans will become crucial as investors and policymakers strive to better understand the provider marketplace,” added Jake Spiegel, senior analyst for policy research. “Investors using HSAs to cover current medical expenses should pay attention to maintenance fees, which vary by provider and can eat into savings account balances over time.”
The overall assessment for each plan is listed below:
HSA Plan Provider/Overall Assessment as Investment Vehicle/Overall Assessment as Spending Vehicle
Alliant Credit Union / Negative / Positive
Bank of America / Neutral / Negative
BenefitWallet / Neutral / Neutral
HealthEquity / Positive / Neutral
HealthSavings Administrators / Neutral / Negative
HSA Bank* / Neutral / Neutral
Optum / Positive / Neutral
SelectAccount / Neutral / Positive
The HSA Authority / Positive / Positive
UMB Bank** / N/A / Neutral
*HSA Bank is Morningstar, Inc.’s HSA plan provider.
**UMB Bank did not provide an investment menu and is therefore excluded from the investment vehicle evaluations.