A major provider of health savings accounts has issued a white paper on the Department of Labor’s fiduciary rule to provide guidance for employers offering HSAs to their workers.
HSA Bank, a division of Webster Bank, N.A., is itself a provider of HSAs, flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and commuter benefits to more than 2 million members, with nearly $5 billion in assets, and acts as both bank and administrator for HSAs.
HSA Bank reviewed the DOL rule to determine its implications for employers, advisors and HSA administrators, distilling the rule’s 600 pages of guidance into a précis that’s more easily accessible.
Among the caveats and recommendations the white paper warns of for HSA administrators and advisors, are the following:
The need to be wary of ensuring that the fees charged to participants within their program are appropriate and fully disclosed;
Reviewing their education and communication materials and practices to make sure they are appropriate and do not constitute advice and recommendations;
Potentially changing the investment options within their products;
Potentially needing new contracts or addenda with employers as a result of the above impacts.
Employers, for their part, need to be cognizant of providing information to employees about HSAs that “crosses the line from general investment education to investment advice,” or if they benefit somehow from the advice being given.
For instance, the paper said, if the employer is getting revenue sharing in connection with specific HSA investments suggested by financial planning tools it provides, or is receiving bonuses for steering employees towards particular HSA vendors, they might want to “scale back those activities and/or revise their compensation arrangements.”
Key dates of which all should be aware are April 10, 2017, the date by which advisors must comply with the new conduct and disclosure requirements contained within the rules, and January 1, 2018, the date by which full compliance with the rules (including best interest contract standards) takes effect.
“Like all regulations such as this, the rules say that you must comply but don’t necessarily identify how to comply,” Kevin Robertson, senior vice president at HSA Bank and author of the white paper, said in a statement.
Robertson continued, “The reality is that employers’ relationships with both providers and participants fundamentally changes under the new regulations. Employers are going to have new responsibilities that they have not previously had, and are going to be responsible for greater levels of oversight.”