A bank that handles an employer’s health savings account program should not reward the employer by giving the employer a discount on another product.
Robert Doyle, director of regulations and interpretations at the Employee Benefits Security Administration, an arm of the U.S. Department of Labor, has given that bit of advice in EBSA Field Assistance Bulletin Number 2006-02, a new batch of questions and answers aimed at field investigators who deal with employer-sponsored HSAs.
EBSA announced in the first batch of HSA guidance, released in 2004, that it would not treat HSA programs as employee benefit plans subject to the Employee Retirement Income Security Act unless the employer required employees to contribute to the plans; limited the employees’ ability to move funds from one HSA to another; interfered with employees’ HSA investment decisions; described the HSA program as an employee welfare benefit plan; or received payments or compensation in connection with an HSA.
Doyle answers most questions in the new batch of guidance in employers’ and vendors’ favor.
An employer, for example, will not turn an HSA program into an ERISA plan simply by paying the employees’ HSA account fees, by limiting the number of HSA vendors that can market their services at the employer’s worksite, or by picking an HSA investment option provider that provides investment options for the employer’s 401(k) plan, Doyle writes.
Similarly, an HSA vendor can offer its own HSA product to its own employees without triggering ERISA, and a vendor can attract business by putting cash incentives into the HSAs, Doyle writes.
Doyle also has blessed the practice of using debit, credit or stored-value cards to link HSAs with lines of credit.
Under IRS rules, “an account beneficiary may not borrow or pledge the assets of the HSA or receive a benefit in his or her own individual capacity as a result of opening or maintaining an HSA because such a transaction would constitute a prohibited transfer to or use of the HSA assets by or for the benefit of the account beneficiary,” Doyle writes.