“HSAs [health savings accounts] are becoming increasingly popular, but investors have few resources at their disposal to navigate the hundreds of plans available to them,” says Leo Acheson, Morningstar’s lead research analyst for HSAs.
Morningstar Inc. published a new study assessing plans from 10 of the largest HSA plan providers: Alliant Credit Union, Bank of America, BenefitWallet, HealthEquity, HealthSavings Administrators, HSA Bank, Optum Bank, SelectAccount, The HSA Authority and UMB Bank. Morningstar evaluated the plans through two different lenses: one, as an investment vehicle to save for future medical expenses and the second as a spending vehicle to cover medical costs today.
The results of the study show room for improvement needed across the board: Morningstar positively assessed only four of the 10 plans for use as an investment vehicle and three as a spending vehicle. Moreover, only one plan received a positive assessment on both fronts.
Morningstar’s manager research group evaluated HSA plans by assigning positive, neutral and negative scores to various criteria and aggregating those scores to reach an overall assessment for each plan, both as an investment vehicle and as a spending vehicle. As an investment vehicle, a plan had to earn two positive scores and no negative scores for menu design, quality of investments, and price to earn an overall positive assessment. An overall negative assessment means a plan scored negative in two of the three areas. As a spending vehicle, an HSA plan with no maintenance fee received an overall positive assessment, while a plan that charged fees regardless of the balance received a negative assessment. Plans that landed in between received a neutral assessment.
Morningstar’s assessments are as follows:
HSA Plan Provider / Overall Assessment as Investment Vehicle / Overall Assessment as Spending Vehicle
- Alliant Credit Union / Negative / Positive
- Bank of America / Neutral / Negative
- BenefitWallet / Neutral / Neutral
- HealthEquity / Positive / Neutral
- HealthSavings Administrators / Neutral / Negative
- HSA Bank / Neutral / Neutral
- Optum Bank / Positive / Neutral
- SelectAccount / Neutral / Positive
- The HSA Authority / Positive / Positive
- UMB Bank / N/A / Neutral
HSA Bank is Morningstar’s HSA plan provider. UMB Bank did not provide an investment menu and was therefore excluded from the investment vehicle evaluations.
“Now that the U.S. House of Representatives and Senate have introduced health care reform bills that would double HSA contribution limits, analysis of HSA plans will become crucial as investors and policymakers strive to better understand the provider marketplace. This report provides key context to understanding the HSA as an investment vehicle but also utilizing it as a spending vehicle,” says Jake Spiegel, senior analyst for policy research.
The full research report may be downloaded here.