Have HSA providers stepped up their game? Sort of.
Morningstar is out with this year’s assessment of health savings accounts, taking a close look at offerings from 10 of the largest plan providers. The verdict: the quality of investment options has improved across HSAs, but high fees and low transparency remain hurdles.
In the second annual study, the Chicago-based research and investing behemoth said it evaluated 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.”
Poetic if nothing else, The HSA Authority was named the best plan in both categories.
“Thanks to increased use of high-deductible health insurance plans, which are often paired with an HSA, and unrivaled tax advantages, HSA plans are more popular than ever,” Leo Acheson, associate director of multi-asset and alternative strategies team at Morningstar, said in a statement. “Out of the 10 plans we’ve evaluated, Morningstar considers The HSA Authority to be the best HSA plan for spenders and investors due to its low fees, strong investment options and the absence of an investment threshold.”
Researchers assigned ratings of positive, neutral or negative to various criteria when evaluating each plan. Those scores were aggregated to reach an overall plan assessment.
For account holders looking to invest HSA assets, the study analyzed the quality and cost of the options within the plan’s investment menu, as well as investment performance and investment threshold (the amount investors must have in their account before investing).
The evaluation of HSAs as a spending vehicle examined maintenance fees, additional fees and interest rates for each plan.
The 10 plans studied included Bank of America, BenefitWallet, Fifth Third, Further (formerly SelectAccount), HealthEquity, HealthSavings Administrators, HSA Bank, Optum, The HSA Authority and UMB Bank.
Across all plans, Morningstar noted the quality of investments is strong and has improved since last year. Menu designs have mostly been upgraded, too. However, a number of plans have yet to make investment choice enhancements, burdening enrollees with high fees.
“We’re encouraged by the improvement in the quality of HSA investment options since last year, but the industry can raise its game by providing greater transparency on fees, investment options and interest rates and further reducing high plan expenses,” concluded Acheson.
The overall assessment for each plan is listed below:
HSA Plan Provider/Overall Assessment as Investment Vehicle/Overall Assessment as Spending Vehicle
Bank of America / Positive / Negative
BenefitWallet / Neutral / Neutral
Fifth Third / Neutral / Neutral
Further / Positive / Negative
HealthEquity / Negative / Neutral
HealthSavings Administrators / Neutral / Negative
HSA Bank / Negative / Neutral
Optum / Neutral / Neutral
SelectAccount / Neutral / Positive
The HSA Authority / Positive / Positive
UMB Bank / Neutral / Neutral
Jessa Claeys is a writer, editor and graphic designer.
