Business
Morningstar Releases Eighth Annual Study on Advancements and Opportunities in Health Savings Account Industry
Assessments of the leading providers highlight continued progress and identify areas for significant improvement CHICAGO--(BUSINESS WIRE)-- Morningstar, Inc.
About this update from Morningstar, Inc.
[{"type":"text","content":"\nAssessments of the leading providers highlight continued progress and identify areas for significant improvement\n\n CHICAGO--(BUSINESS WIRE)--\nMorningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment insights, today published its eighth annual landscape study on health savings accounts (HSAs) available to individuals. The study assesses the current state of the HSA industry and releases Morningstar's assessment of 11 of the top HSA providers on two different use cases: 1) as investment accounts to save for future medical expenses and 2) as spending accounts to cover current medical costs.\n\nOverall, the study found meaningful improvements in HSA features, such as lower fees and better investment options. However, Morningstar highlights substantial room for growth in the industry, with just four providers receiving an Above Average or better rating on both evaluated use cases.\n\n\"Efforts by providers to enhance HSA offerings have proven beneficial for investors,\" said Greg Carlson, senior manager research analyst. \"Nonetheless, transparency issues, including hidden costs, continue to pose challenges for investors as they navigate their healthcare finances. Our study underscores the progress made while highlighting the hurdles that need to be addressed for HSAs to achieve their full potential.\"\n\nHighlights from the study include:\n\n\nTotal assets in HSAs soared to $123 billion in 2023, maintaining their strong growth trajectory. This growth is driven by the increased prevalence of high-deductible health plans (HDHPs) since HSAs were introduced.\n\n\nFidelity continues to lead among providers, earning a High assessment for both its spending account and savings account features. Notably, it offers an interest rate of 2.69% on all balances, far surpassing other providers, none of which offer more than 1% on any balance level.\n\n\nHSA contribution limits are set to rise in 2025, bolstering their already outstanding tax advantages, which are superior to 401(k)s, IRAs, and 529 plans. Proposed legislation would also allow individuals to contribute to an HSA even if their spouse uses a flexible spending account (FSA) and enable certain fund rollovers from FSAs into HSAs.\n\n\nProviders and regulators could improve participant awareness and simplify processes to increase engagement in HSA features. For i...