How new fiduciary rule impacts your HSA options

If your company offers an HSA to employees, you’ll need to be aware of how the new fiduciary rule factors into that offering.  

The DOL’s controversial fiduciary rule contains some 600 pages of onerous details most of which deal specifically with service providers and retirement accounts. But retirement plans aren’t the only accounts that are impacted by the new rules.

HSA Bank, an HSA provider with more than 2 million members, recently put out a whitepaper, DOL Fiduciary Standards, aimed at helping employers as well as HSA advisors and administrators understand their new responsibilities under the fiduciary rule.

A thin line

The main takeway from the whitepaper: Employers will now have to walk a thin line when it comes to talking to employees about the HSAs they offer.

According to the whitepaper, firms must understand if the info they provide “crosses the line from general investment education to investment advice,” as well whether they would directly benefit from providing such advice.

One specific example the paper cited: revenue sharing. Specifically, if employers are getting any type of revenue sharing or receiving any type of bonuses for nudging workers toward a specific HSA vendor, they could easily find themselves in jeopardy of violating the new rule and should “scale back those activities and/or revise their compensation arrangements.”

Advisor, administrator responsibilities

The report also chronicled what HSA advisors and administrators should be doing in light of the new rule. This list includes:

• ensuring the fees charged to HSA participants are appropriate and fully disclosed
• reviewing all education and communication materials — and education/communication methods — to make sure they are appropriate and don’t constitute advice and recommendations, and
• revising contracts and collateral materials to reflect the changes in the final rule.

In addition to their own expanded responsibilities, employers need to be acutely aware of the expanded responsibilities of their HSA advisors and administrators, too. After all, the fiduciary rule requires employers to exercise greater oversight of the service providers they partner with. And the feds could hold them responsible for the mistakes of their providers.

Another potential impact of the fiduciary rule that all employers will want to be aware of: increased provider pricing. The expanded responsibilities and precautions required under the new fiduciary rule are going to force service providers to sink more time and resources into crossing their t’s and dotting their i’s — and that’s bound to be reflected in their pricing structures.