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Morningstar Finds Health Savings Account Providers Have Improved Offerings, But Transparency and Fees Remain Hurdles
As assets in health savings accounts (HSAs) climb higher, Morningstar's annual assessment of the HSA landscape revealed Fidelity as the continued leader for
About this update from Morningstar, Inc.
[{"type":"text","content":"As assets in health savings accounts (HSAs) climb higher, Morningstar's annual assessment of the HSA landscape revealed Fidelity as the continued leader for both HSA investors and spenders\n\n\nCHICAGO, Oct. 7, 2021 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today published its fifth annual landscape study on health savings accounts (HSAs) available to individuals. Morningstar evaluated 11 of the most prominent HSA providers' offerings for two different use cases: as an investment account to save for future medical expenses and as a spending account to cover current medical costs. This year's study finds the best HSA provider for investors is Fidelity, and the best HSA providers for spenders include Fidelity and Lively. \nProviders have made progress over the past year by cutting fees, streamlining investment menus, and offering higher quality funds, yet there's still room for improvement. Despite cuts, fees vary across providers and by account balance; most require individuals to keep money in spending accounts before they can invest; and fund lineups still hold redundant and niche options that can be difficult to understand.\n\"There is limited transparency around HSAs and their associated fees, especially when investors are looking to open an account that is not through their employer. Our assessment of HSA providers helps investors understand and navigate HSAs available to them,\" said Megan Pacholok, lead author of the study and manager research analyst. \"Since we first introduced our HSA assessments five years ago, we've seen providers improve their offerings by cutting fees and simplifying investment menus. As HSAs continue to evolve, it is important for providers to continue to be more transparent, include strong investment options, and keep costs low.\"\nHighlights from the study include:\nFidelity continues to stand well above its peers, with a High overall investment account assessment, comprised of High assessments in Price and Investment Threshold and Above Average assessments in Menu Design and Quality of Investments. No HSA earned universally top marks, or an assessment of High, on the underlying drivers of HSA quality, such as attractive interest rates for spending accounts or sound investment menu design for investment accounts. Fees continue to decr...