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DOL Extends Fiduciary Responsibility to HSA Advisors

Apr 21, 2016

April 8, 2016

On Wednesday, the federal Department of Labor (DOL) released a final version of its much-anticipated rule to address conflicts of interest in retirement advice, which is widely referred to in the industry and news media as the "fiduciary rule." The new regulation establishes how investment advisors who assist employers and employees with “investment property” components of a group benefit plan governed by the Employee Retirement Income Security Act (ERISA), including Health Savings Accounts (HSAs), may have fiduciary responsibility even if they provide advice on a one-time basis. Typically individuals who are a fiduciary of a group benefit plan regulated by ERISA may not receive compensation or commissions from third-party vendors that provide services to the group benefit plan. However, a separate piece of guidance issued by the DOL yesterday establishes a “best interest contract exemption” that allows advisors to be paid commissions for their work, as long as they follow very specific requirements.

While almost all of the attention surrounding the rule is focused on advisors who help employers and employees with Individual Retirement Account (IRA) options, the new requirements also extend to brokers who help employers set up HSAs in conjunction with the sale and service of high-deductible health plans. NAHU and others argued to the DOL that the inclusion of HSA advice or advice associated with the sale and service of any group health insurance policy in the scope of this regulation was inappropriate, but unfortunately when it came to HSAs, the Obama Administration did not agree.

Click ​here to read the rest of this article on the NAHU website.

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