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DOL Fiduciary Rule and HSAs

Last week the DOL released the final regulations which addressed conflicts of interest regarding investment advice.  This post answers questions about application of the regulations to Health Savings Accounts (HSAs).

Do the Fiduciary Rules Apply to HSAs?

The Fiduciary Rules clarify that the term “IRA” (individual retirement account) includes health savings accounts (HSAs). [1]  As a result, the new guidance regarding what constitutes “covered investment advice” and the rules for  “best interest contracts” apply to HSAs in the same way in which they apply to IRAs.

How do the Rules Apply to HSAs?

Essentially, the rules require that where advice is given to an HSA owner and the provider of the advice receives compensation related to the transaction, the provider of the advice must adhere to certain standards.  In most instances, disclosure must be made regarding the nature of compensation received, and that the amount of compensation does not depend upon whether the advice given is followed. For more information regarding what constitutes “Covered investment advice” and what types of relationships are subject to the rule, please see our general post regarding  the Fiduciary rules.

What Impact Will the Fiduciary Rules Have on the Services Provided by NBS?

As an independent third-party administrator, the final regulations do not affect NBS services directly because NBS does not provide advice regarding the investments you may choose to make with your HSA funds.    However, NBS recognizes that some aspects of the rules regarding third-party payments will likely result in additional disclosures and in some cases, the need to enter into contracts with the financial institutions which offer investment products for your HSAs.  NBS will continue to study and monitor developments to the fiduciary rules and its impact on all of our partners in the providing services to HSAs.  To ensure that you receive all updates, please subscribe to this blog.

[1] 29 CFR § 2510.3-21(g)(6)(ii)).