Important Changes to the Term “Fiduciary”
Recent changes to the definition of “fiduciary” have grown to include those who offer guidance on investment options to health savings account (“HSA”) and individual retirement account (“IRA”) holders.
With the new regulations, if an employer provides guidance to employees regarding their investment options, such as pushing one option over another, the employer can now be considered a plan fiduciary. Additionally, due to the prohibited transaction provisions of Employee Retirement Income Security Act of 1974 (“ERISA”) and Internal Revenue Code (“Code”), they are restricted to not receive commissions or other gains from plans, account holders, and beneficiaries. In the event that an employer’s actions were not in the best interests of account holders/beneficiaries, it opens the door to a possible lawsuit. Generally speaking, the new regulations shouldn’t put employers in any greater danger. However, as we noted earlier, if employers offer guidance or if they get monetary gains for employees selecting particular options, they now put themselves in a position where they are within the scope of the new definition of “fiduciary”.
If you’re concerned about the new regulations, and the impact it may have on your business, BASIC’s HSA@AnyBank is here to help. By having BASIC handle your HSA administration, we have the knowledge and expertise to keep you compliant. We also have a variety of banking partners that we work with and this allows the employer to step back while BASIC and the financial institution(s) handle the rest. Additionally, having a variety of banking partners allows your employee population to choose the one that best meets their needs and help you to avoid pushing one option over another. In fact, if your employee already has an HSA account setup, there is no need for them to close their current account and open a new one because we can handle it as is. This goes for all of your employees, they can each have their own HSA account at any bank. By offering options and allowing employees to use any bank of their choosing, it allows the employer to focus on their business while BASIC keeps them compliant.
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Works Consulted
Miller, Stephen.” Fiduciary Rule Affects Relationships with HSA Vendors.” Society for Human Resources Management (“SHRM”) www.shrm.org/resourcesandtools/hr-topics/benefits/pages/hsas-fiduciary-rule.aspx. Accessed 7 Aug. 2017.
