Fiduciary Reforms Will Impact Expanding HSA Market

The DOL fiduciary rule expansion establishes ERISA fair dealing requirements in the sale and service of health savings accounts; employers have a lot of questions about what this means. 

By John Manganaro | June 15, 2017
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Chad Wilkins, president of HSA Bank, and Kevin Robertson, senior vice president, recently sat down with PLANADVISER to talk about their expectations for health care reform and other hot-button items on the policy agenda in Washington.

The pair had some important commentary to share regarding the implementation of the Department of Labor (DOL) fiduciary rule and related exemptions. It is surely common industry knowledge by now that the DOL rulemaking has greatly expanded the number of advisers and investment/recordkeeping service providers deemed fiduciaries under the Employee Retirement Income Security Act (ERISA). But the pair warned the rules apply not only to traditional retirement products such as 401(k)s, but also to health savings accounts (HSAs).

“This fact has generated no small about of confusion and concern among employers who make HSAs available to their employees,” Wilkins suggests. “While HSAs aren’t normally thought of as a retirement vehicle, the DOL broadened the scope of the rules to include these plans due to their long term savings and investment aspects.”

Wilkins and Robertson feel the jury is actually still out regarding the question of whether the employers will become fiduciaries to their HSA-using employees. Advisers making investment recommendations for individuals using HSAs will likely take on some new level of fiduciary responsibility, they expect, but as it pertains to an employer’s own fiduciary exposure, the general consensus within the industry is that the new regulations “probably do not automatically require employers offering HSA plans to be considered fiduciaries.”

As is commonly the case in examining ERISA standards, any given employer’s fiduciary exposure will depend on the particulars of their HSA programming and to what degree they offer advice versus education.

“This is one of the first questions an employer will need to answer for their HSA plan as the DOL rules come into play,” Robertson says. “There may be no technical or legal responsibility of an employer to act as a fiduciary for their HSA plan, but we strongly recommend that employers implement certain features of ERISA best practices, to mitigate risk for themselves and their employees.”

NEXT: Fiduciary management of HSAs