Morningstar’s annual review of health savings accounts (HSAs) shows that accounts have seen exponential growth in recent years, despite facing issues with transparency and ease of use.
HSAs have risen to nearly $116 billion since 2006, thanks to increasing usage of high-deductible health insurance plans (HDHPs), along with tax benefits offered by the feature. HSA features have also improve, as plans cut fees and offer higher quality investment menus. Yet, the process of investigating account details, signing up for an HSA, and funding one remains complicated for both employers and participants.
Additionally, some of the top providers still charge maintenance and/or investment fees and require a minimum account balance before participants can invest, reports Morningstar. As a result, Morningstar’s review calls for more improvements within HSAs.
“Despite market volatility over the past year, investors in HSAs showed resiliency and continued to put money into their accounts. Assets have climbed since our study last year as HSA offerings continue to improve—a reflection of the industry maturing,” said Greg Carlson, lead author of the study and senior manager research analyst. “Even so, there are several ways for HSA providers to progress. Our study identifies areas that are key to making the industry more investor-friendly.”
Top 10 HSA providers
Morningstar evaluated 10 of the top HSA providers based on (1) spending accounts for medical costs and (2) investment accounts for long-term saving, finding that Fidelity and HealthEquity both ranked “Above Average” assessments or higher in both cases.
The research shows that HealthEquity, Optum, Fidelity, and HSA Bank (Morningstar’s HSA plan provider) have dominated the HSA industry in recent years. HealthEquity passed Optum in 2021, after multiple acquisitions fueled growth within the firm.
For the second year in a row, Fidelity is the only provider to earn an overall assessment of “High,” largely due to its 2.69 interest rate on all balances (none of the other providers exceeded rates of 1.00% for any balance level). Fidelity’s asset growth could also poise the large investment manager to soon become the leading provider, Morningstar estimates. “The firm began offering accounts to individuals in 2018, and as interest rates have risen in the past 18 months, Fidelity’s industry-leading payout to HSA participants has gained an even bigger edge over rivals,” Morningstar reports.
Fidelity is also one of the seven providers to not charge a maintenance fee, with the other six being First American, HSA Bank, HealthEquity, Lively, Optum, and UMB.
As for the other providers, Associated Bank ranked “Average” in its assessment, while Bank of America and the recently introduced Saturna garnered the lowest scores in the “Below Average” category.
The 10 companies reviewed by Morningstar, along with its overall assessments, include:
| HSA Provider | Overall Assessment as Investing Account | Overall Assessment as Spending Account |
| Associated Bank | Above Average | Average |
| Bank of America | Average | Below Average |
| Fidelity | High | High |
| First American Bank | Average | Above Average |
| HealthEquity | Above Average | Above Average |
| HSA Bank* | Average | Above Average |
| Lively | Average | Above Average |
| Optum | Average | Above Average |
| Saturna | Average | Below Average |
| UMB | Above Average | Above Average |
More information on Morningstar’s annual HSA report can be found here.
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