First Dollar Joins Forces With Morningstar Investment Management to Simplify the Investment Experience for Health Savings Account Holders

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Oct 24, 2022, 06:00 ET

AUSTIN, Texas, Oct. 24, 2022 /PRNewswire/ -- First Dollar, a technology company that powers benefit providers with its modern benefit infrastructure, is teaming with the Workplace Solutions group within Morningstar Investment Management LLC, a subsidiary of Morningstar, Inc., to simplify the way account holders select investment options for their health savings accounts (HSAs). This collaboration will enable First Dollar to deliver a more streamlined investment experience for the members and clients who use its Health Wallet platform.

As U.S. healthcare costs continue to climb faster than inflation, more consumers are looking to take advantage of tax-free investing through their HSAs. Morningstar's 2022 Health Savings Account Landscape found the HSA market has grown at a 31% annual rate over the past 15 years; however, just 9% of HSA accounts reviewed have investment assets. This signals that HSA users are not taking full advantage of the accounts' investment features or triple tax benefit, owing partly to the industry's opacity and administrative burdens. When they're used optimally, the report says, HSAs have more tax benefits than 401(k)s, 529 education-savings plans, and traditional and Roth IRAs.

"Historically, HSA investing has been underutilized by the majority of account holders due to gaps in education, product complexity, or limited investing options with high fees," said Colin Anawaty, Chief Product Officer at First Dollar. "Our goal in working with Morningstar Investment Management is to create an investment experience that is simple and democratic, which we believe is a game changer. Both companies are mission-driven and culturally aligned to do what is best for the consumer by making investing more accessible to more people."

First Dollar is a modern embedded benefits platform that providers like third-party administrators, health plans, and financial institutions use to increase their product offerings easily. The platform mitigates user friction with embeddable widgets and APIs, white-label options to limit consumer confusion, and multi-language localization support. Within this platform, Morningstar Investment Management will provide First Dollar with a curated list of exchange-traded funds (ETFs) and an open brokerage list of ETFs and hundreds of individual securities by applying a similar approach it uses to build investment menus and lineups for more than 21,000 retirement plans (as of June 30, 2022). This research-backed approach enables the Health Wallet platform to offer diversified asset classes and investments that have passed Morningstar Investment Management's screening process.

"First Dollar is committed to building an enhanced investment platform and helping individuals maximize the value of their HSA account," said Brock Johnson, president of Global Retirement and Workplace Solutions at Morningstar Investment Management. "That vision aligns perfectly with our mission of empowering investor success. The investment lists are the first step in what we hope will become a collaboration with First Dollar that will change the way people use their HSA savings."

First Dollar will incorporate the curated lists in the Health Wallet platform in January 2023.

About First Dollar

First Dollar powers innovative benefit providers with its benefits infrastructure technology that both consumers and providers love to use. Our health wallet platform gives benefit providers the tools they need to launch tax-advantaged accounts, supplemental benefits, or whatever they dream up next. For more information, visit firstdollar.com or connect with us on linkedin.

SOURCE First Dollar