Only 9% of HSA accounts reviewed have investment assets, “signifying that HSA users are not taking full advantage of the accounts’ investment features or triple tax benefit.”
“So far, Fidelity is the only provider that offers higher interest rates than the average national savings account rate of 0.17%.”
On Tuesday, Morningstar released its sixth annual landscape study on health savings accounts (HSAs). The study found assets in HSAs have grown at a 31% annualized growth rate over the past 15 years. While the HSA industry has improved its offerings in that time, “several participants have room for improvement,” according to the Chicago-based firm.
The study evaluated 10 of the most prominent HSA providers’ offerings in two different use cases: investment accounts to save for future medical expenses and spending accounts to cover current medical costs.
Fidelity took the top spot and offers the most attractive HSA for both spenders and investors, as it was the sole provider with a High overall Investment Account assessment and the sole provider with a High overall Spending Account assessment.
Generally, HSA providers have improved their offerings since Morningstar’s first report in 2017; however, fee schedules remain high and vary across providers, most require individuals to meet spending account minimums before they can invest, and fund lineups still offer redundant and complicated options that can be hard to use.
As interest rates have risen in the past year, interest paid to HSA holders has become increasingly important to analyst evaluations. The best HSA providers pay interest rates that increase with market shifts. So far, Fidelity is the only provider that offers higher interest rates than the average national savings account rate of 0.17%.
Utilizing the Morningstar Analyst Rating™ (Analyst Rating) and Morningstar Quantitative Rating™ for funds (Quantitative Rating), each fund lineup supports an Above Average Quality of Investments assessment for all 10 providers. Morningstar Medalists1 – a fund with an Analyst Rating or Quantitative Rating of Gold, Silver, or Bronze – made up at least 88% of each lineup, up from 85% last year.
The four largest HSA providers – HealthEquity, Optum, Fidelity, and HSA Bank – account for nearly two-thirds of the total HSA market, with roughly $64 billion in assets combined. HealthEquity overtook Optum at year-end 2021 as the industry’s largest provider and widened its lead in 2022’s first half.
| HSA Provider | Overall Assessment as Investing Account | Overall Assessment as Spending Account |
| Associated Bank | 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 | Above Average | Above Average |
| Optum | Average | Average |
| The HSA Authority | Above Average | Above Average |
| UMB | Average | Average |