www.morningstar.com
Open in
urlscan Pro
143.204.98.61
Public Scan
Submitted URL: https://livelyme.mxdogwood.com/5dfcfd6bd663160021021671/l/e1dN13aJQr9bR4pD2?messageId=pjjwJ6d01xJf3WnvL&rn=gIyVmblV2Sg4GavpkI&r...
Effective URL: https://www.morningstar.com/articles/1003852/the-top-hsa-providers-of-2020
Submission: On August 31 via api from US
Effective URL: https://www.morningstar.com/articles/1003852/the-top-hsa-providers-of-2020
Submission: On August 31 via api from US
Form analysis 1 forms found in the DOM
<form class="mdc-site-search__form" data-v-1210c200="" __bizdiag="0" __biza="W___">
<div role="search" class="mdc-search-field mds-search-field mdc-site-search__search-field" data-v-894e5c78="" data-v-1210c200=""><input aria-label="Search" placeholder="Search Quotes and Site" type="text"
class="mdc-search-field__input mds-search-field__input" data-v-894e5c78=""> <svg aria-hidden="true" class="mdc-icon mds-icon mds-search-field__search-icon mds-icon--s" data-v-894e5c78="">
<use xlink:href="/assets/img/08774a6.svg#search--s"></use>
</svg> <!----> <span class="mds-search-field__input-focus-outline" data-v-894e5c78=""></span></div> <!---->
</form>Text Content
Advertisement
Skip to Content
Get 14 Days Free Sign Up Sign In Sign In
* Topics
* Sustainable Investing
* Advisor Insights
* Personal Finance
* Market Volatility
* Retirement Planning
* Start Investing
* Save for College
* See All
Funds
ETFs
Stocks
Bonds
Best Investments
Markets
Portfolio
* Investments
* Topics
* Sustainable Investing
* Advisor Insights
* Personal Finance
* Market Volatility
* Retirement Planning
* Start Investing
* Save for College
* See All
* Funds
* ETFs
* Stocks
* Bonds
* Best Investments
* Markets
* Portfolio
* For Professionals
* Software & Data Services
* Morningstar Direct
* DBRS Morningstar
* Sustainalytics
* PitchBook
* ESG Investing Solutions
* Morningstar Research
* Morningstar Data
* Money Management
* Morningstar Indexes
* Morningstar Managed Portfolios
* Morningstar Retirement Manager
* Solutions for Business
* All Products & Services
* Company
* About
* Who We Are
* Careers
* Diversity, Equity, & Inclusion
* Corporate Sustainability
* Privacy
* Events
* Morningstar Investment Conference
* Awards
* Webinars
* Newsroom
* Investor Relations
Fund Spy
THE TOP HSA PROVIDERS OF 2020
Fidelity continues to stand out as the best HSA for investing and for spending.
Leo Acheson, CFA, Megan Pacholok
Oct 14, 2020
Link Copied
Health savings accounts are the most effective vehicles for covering current
medical costs and for holding investments to save for future medical
expenses--needs that have particularly been brought to the forefront this year.
In our 2020 Health Savings Account Landscape, we rank 11 of the largest or most
popular HSAs available to individuals from these two different standpoints: HSAs
as a spending account to cover current medical costs, and HSAs as an investment
account to save for future medical expenses. (Note that these rankings may be
different when evaluated for use by employers, where fees are often negotiable
based on several factors.) Choosing an HSA is challenging given the industry's
opaque and frequently changing nature, and our evaluations aim to empower
investors by helping them choose the best HSA for their situation. (Morningstar
Direct and Office clients can download the report here.)
This year, our report also revealed asset-growth trends and changes in market
share over the past several years at some of the most prominent HSA providers.
We also enhanced our methodology by assessing HSAs on a five-point scale instead
of a three-point scale to improve transparency and better help individuals
compare HSAs.
We found that, as before, Fidelity offers the best all-around HSA for
individuals, as it is the only HSA provider that earns a High assessment for
both its spending and investment accounts. Here, we take a closer look at each
set of rankings and the factors that contributed to each HSA provider's
standing.
5 Key Takeaways on HSA Providers
A few of our main findings on HSA providers include:
* Overall, providers continued to improve on multiple fronts over the past
year, with several HSAs cutting fees, improving investment menu designs, or
lowering investment thresholds, which require participants to maintain a
minimum checking account balance before they can invest. Still, there's
plenty of room for progress. Fees generally remain high and vary
significantly across providers, and most continue to impose investment
thresholds.
* HSAs posted healthy growth rates in the first half of 2020 despite market
turmoil triggered by the pandemic. Total assets at the four largest HSA
providers, which account for more than half of the industry's assets, grew by
about 12% during this period and have more than doubled since the start of
2017.
* Fidelity's market share catapulted to roughly 10.5% as of midyear 2020 from
4.5% at the end of 2016. Optum remains the largest HSA, though its market
share shrank to about 17% from 21% over that same period.
* In the first half of 2020, Fidelity's assets grew by $2.2 billion, roughly
matching the combined asset growth of the three other largest HSA providers.
* According to the 2020 Midyear Devenir HSA Research Report, industry assets
have grown about 10-fold over the past decade, reaching $73.5 billion as of
midyear 2020.
The Best HSAs for Spenders
Our rankings for HSAs as spending accounts show that:
* Fidelity and Lively come out on top. Among the HSA providers we evaluated,
these are the only HSAs that charge no fees to spenders, avoiding maintenance
and additional fees.
* HealthEquity is the third-best choice. It eliminated its annual maintenance
fee of $35.40, though it still has a handful of additional fees.
* The HSA Authority comes in fourth place. It's always waived maintenance fees
but has many additional fees.
Still, additional fees, such as those levied on paper statements, account
closings, and excess contributions, are mostly avoidable or infrequent and don't
affect those providers' High assessments as spending vehicles.
The full list of rankings for HSAs as spending accounts is shown below.
MORE ON THIS TOPIC
* Our 2019 Rankings of 11 Top HSA Providers
It's worth noting that interest rates offered on checking accounts are no longer
a differentiator, since the pandemic led the Federal Reserve to slash interest
rates to near zero in March, causing yields on checking accounts to fall to near
zero across all providers. Last year, Fidelity offered a higher yield than other
competitors, making it by far the most attractive offering for spenders, but it
no longer sports a yield advantage versus its peers.
Illustrating the advantage that Fidelity, Lively, HealthEquity, and The HSA
Authority have relative to other providers, the chart below shows how providers
stack up when considering both maintenance fees paid and interest dollars earned
at account balances ranging from $0 to $10,000. The chart shows:
* Accountholders at Fidelity, Lively, HealthEquity, and The HSA Authority
essentially break even across all account balances.
* Accountholders at the other seven providers incur net costs of about $26 to
$42 on HSA balances of $3,000 or less, when some providers begin to waive
fees. However, because the average accountholder has a $2,000 balance, those
waivers don't help most individuals. Plus, some providers never waive
maintenance fees regardless of account balance.
The Best HSAs for Investors
Fidelity again represents the best HSA for investing, as it:
* Has strong investment options.
* Offers a well-designed investment menu.
* Allows first-dollar investing by not requiring investors to maintain a
minimum checking account before investing.
* Charges rock-bottom fees that no other provider can compete with. Investors
at Fidelity can buy a passive 60% stock/40% bond portfolio for an all-in cost
of 0.02% regardless of account balance.
Conversely, other providers charge higher fees that typically vary depending on
the account balance. Assuming the average HSA investment account balance of
$14,000, Bank of America has the second-cheapest passive 60/40 portfolio, with a
0.26% fee. The HSA Authority and HealthEquity are the next cheapest, offering
passive 60/40 portfolios for 0.38% and 0.39% on a $14,000 balance.
Slightly detracting from the appeal of Bank of America and HealthEquity's HSAs
is that they require investors to keep $1,000 and $500, respectively, in their
checking accounts before investing, creating an opportunity cost for individuals
seeking to invest. The HSA Authority allows first-dollar investing, but its
expansive investment lineup isn't easy to navigate. Still, these three HSA
providers represent solid picks for investors, supporting their Above Average
investment account assessments.
The full list of rankings for HSAs as investment accounts is shown below.
Illustrating Fidelity's advantage versus other providers, the chart below shows
the total fee that investors pay at each provider for account balances ranging
from $5,000 to $50,000. You can see that:
* Fidelity's all-in fee of 0.02% is consistent across account balances.
* At Bank of America and The HSA Authority, fees decline as account balances
grow. Both charge dollar-based fees that that become less pronounced when
expressed in percentage terms as assets grow.
* HealthEquity is attractively priced for investors with smaller balances of
$10,000 or less. However, it charges a flat percentage-based fee instead of
dollar-based fees, so its fee advantage erodes once assets surpass $20,000.
* Accountholders at some of the other providers pay hefty fees regardless of
account size. Optum, Lively, and HSA Bank are expensive, where investors with
a $14,000 balance pay between 0.56% and 0.68% for a passive 60/40 portfolio.
How We Evaluated HSAs
Three criteria influence our assessments of HSAs as spending accounts:
maintenance fees, interest rates offered, and additional fees. We score each
criterion on a five-point scale of High (5), Above Average (4), Average (3),
Below Average (2), and Low (1). The criteria scores are then used in conjunction
with their weights to derive a score that reflects our view of an HSA's merits.
We weight each criterion differently based on its importance. Weightings can
change from one year to the next if there are material changes to any of the
three criteria. Notably, maintenance fees represent the most important
consideration and entirely drove this year's spending account assessments. Since
our last report, we adjusted the criteria weightings as follows:
* Maintenance fees: Increased weighting to 100% from 75%.
* Interest rates: Decreased weighting to 0% from 25%.
* Additional Fees: Maintained weighting at 0%.
We have identified four criteria that we believe are crucial to determining the
overall merit of HSAs as investment accounts: Menu Design, Quality of
Investments, Price, and Investment Threshold. We score each criterion on a
five-point scale of High (5), Above Average (4), Average (3), Below Average (2),
and Low (1). The criteria scores are then used in conjunction with their weights
to derive a score that reflects our view of an HSA's merits. The weightings
assigned to each criterion remained unchanged since last year:
* Menu Design: 20%
* Quality of Investments: 20%
* Price: 40%
* Investment Threshold: 20%
More details about our research and methodology, as well as an overview of
industry asset growth and changes in market share at each provider, are
available in the full report.
And for more insights from our team on the HSA ratings, sign up for our webinar.
For more research on top HSA providers, download our 2020 report. Get My Copy
MORE ON THIS TOPIC
* Our 2019 Rankings of 11 Top HSA Providers
* It's Open Enrollment Season. Have You Taken a Good Look at an HSA?
* A Checklist For Open Enrollment Season
* Hsas Offer Path To Tax Deduction
* What Is An Hsa?
* Hsa Vs. Fsa: How To Choose One
* Can You Save Too Much In A Health Savings Account?
SHARE THIS ARTICLE
Link Copied
SPONSOR CENTER
TRANSPARENCY IS OUR POLICY. LEARN HOW IT IMPACTS EVERYTHING WE DO.
Read More
Transparency is how we protect the integrity of our work and keep empowering
investors to achieve their goals and dreams. And we have unwavering standards
for how we keep that integrity intact, from our research and data to our
policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day
business.
HOW WE MAKE MONEY
We sell different types of products and services to both investment
professionals and individual investors. These products and services are usually
sold through license agreements or subscriptions. Our investment management
business generates asset-based fees, which are calculated as a percentage of
assets under management. We also sell both admissions and sponsorship packages
for our investment conferences and advertising on our websites and newsletters.
HOW WE USE YOUR PERSONAL DATA
How we use your information depends on the product and service that you use and
your relationship with us. We may use it to:
* Verify your identity, personalize the content you receive, or create and
administer your account.
* Provide specific products and services to you, such as portfolio management
or data aggregation.
* Develop and improve features of our offerings.
* Gear advertisements and other marketing efforts towards your interests.
To learn more about how we handle and protect your data, visit our privacy
center.
HOW WE APPROACH EDITORIAL CONTENT
Maintaining independence and editorial freedom is essential to our mission of
empowering investor success. We provide a platform for our authors to report on
investments fairly, accurately, and from the investor’s point of view. We also
respect individual opinions––they represent the unvarnished thinking of our
people and exacting analysis of our research processes. Our authors can publish
views that we may or may not agree with, but they show their work, distinguish
facts from opinions, and make sure their analysis is clear and in no way
misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict
separation between our sales teams and authors to remove any pressure or
influence on our analyses and research.
Read our editorial policy to learn more about our process.
SITE INDEX
* What We Do
* For Business
* For Investors
* Insights
* Morningstar Magazine
* Newsletters
* Podcasts
* Trending Research
* Investing Dictionary
* About Us
* Our Story
* Careers
* Our Signature Methodologies
* Global Contacts
* Get Help
* Help Center
* joe@morningstar.com
* Discussion Forums
* Advertising Opportunities
* Feedback
--------------------------------------------------------------------------------
United States
© Copyright 2021 Morningstar, Inc. All rights reserved. Dow Jones Industrial
Average, S&P 500, Nasdaq, and Morningstar Index (Market Barometer) quotes are
real-time.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of
Service apply.
Terms and Conditions Privacy Center Disclosures Member User Agreement
Corrections Cookies Accessibility