- While many employers and plan sponsors might think that new regulations banning "conflicted" investment advice only applies to 401(k) plan participants, they need to know that the regs could also be applied to any advice given employees enrolled in health savings accounts (HSAs) at the workplace, according to SHRM.
- In April 2016, the Department of Labor (DOL) expanded the application of the fiduciary standard (takes effect in April 2017), as it is designed to keep financial advisors in line by delivering investment advice in the best interests of retirement plan participants.
- But, according to experts who talked to SHRM, the rule also extends to compliance obligations for HSA plan sponsors, to the extent that they contract or otherwise provide participants with access to investment advisors.
Driven by high-deductible healthcare plans, HSA use is on the rise. As individually owned accounts they typically are constructed to avoid the Employee Retirement Income Security Act (ERISA) and its many compliance requirements, SHRM reports. However, the Labor Dept.'s final rule includes non-ERISA plans, including individual retirement accounts and HSAs, and the rule is very clear on it.
SHRM mentions a new white paper from Milwaukee-based HSA Bank that gives HR and benefit leaders an outline to how the DOL's fiduciary rule can affect employers who contract with HSA services firms, either directly or through health insurers.
To limit liability risks, HSA vendors and financial advisors must make sure any fees charged to HSA participants are completely transparent and within the Justice Dept. regs. Also, check over any education and communication materials to ensure they don't constitute investment advice and recommendations. Also, it's a good idea to pay close attention to changing investment options employees in HSA plans receive.