Are you looking for a new health savings account provider? One of the titans in the industry – Fidelity – might be your best bet, although there are other great options available, according to a new Morningstar ranking of the 11 Best HSA Plans.
Morningstar says Fidelity is the only vendor surveyed to achieve a high rating – the top designation – for both expense and investment accounts.
To determine the best plans, Morningstar evaluated the HSAs available to individuals. Employer sponsored accounts were not included in the analysis.
Many people use HSAs as their annual expense account, tapping into their account to pay medical bills as they arise. Others use HSAs as an investment account, using the stock market to grow funds with the idea of mining the money later, possibly in retirement.
Morningstar notes that it took both of these approaches into account when compiling its rankings. He categorized each plan into individual categories – from fees to interest rate to quality of investment choices – but also ranked plans based on an overall score.
Five plans achieved an overall “high” ranking for HSAs used as expense accounts:
- loyalty
- Living
- HSA Bank
- Health Equity
- HSA Authority
Of the HSAs used as investment accounts, only Fidelity received an overall rating of “high”. Associated Bank and Bank of America took the next two places in this ranking with overall “above average” designations.
Morningstar tells those who fall into the “spenders” category – tapping into their account to pay for medical bills as they arise – “Fidelity and Lively offer the best options,” because they don’t charge anything. costs to spenders, including maintenance costs and one-time additional costs.
Fidelity has also been “a big winner” for those who fall into the “investor” category and plan to use their HSA account to buy stocks and other investments with the goal of growing the money in their account for the next few months. many years. This is the third consecutive year that Fidelity has topped this ranking.
Morningstar notes that Fidelity “does not impose maintenance or investment fees and includes cheap passive funds in its well-constructed investment menu.”
Finding the right HSA plan for you
As Morningstar notes – and as we’ve always suggested – HSA plans offer some of the best tax benefits you’ll find anywhere. The triple tax advantages associated with HSAs are:
- You don’t pay taxes on money deposited into an account.
- Money grows tax free.
- The money can be withdrawn tax-free if it is spent on qualifying medical expenses.
As Morningstar says:
“People who use their HSA dollars for routine health care expenses benefit from the fact that HSA contributions are excluded from income taxes, Medicare and Social Security. People who invest and grow their HSA dollars to pay for future medical expenses also benefit from the tax-free growth of HSA dollars. “
Choosing the right HSA account probably depends on whether you fall into the “spender” or “investor” category. Money Talks News partner Lively, who finished second on Morningstar’s list, is an option.
MTN collaborator Miranda Marquit uses Lively. To learn more about her experience, see “3 Ways a Health Savings Account Can Improve Your Finances”.
Remember, you must have a high deductible health insurance plan to be eligible for an HSA. If you do, check out “21 Surprising Things You Can Pay With An HSA.”
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