Employers can take many commonsense steps without accidentally turning a health savings account program into an “ERISA plan,” but they should be careful about accepting any kind of compensation, including discounts on non-HSA services, from HSA vendors.
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 advice in a new batch of EBSA HSA questions and answers.
EBSA has published the guidance in EBSA Field Assistance Bulletin Number 2006-02, a document aimed at Labor Department field investigators who deal with employer-sponsored HSAs.
Many employers are eager to avoid subjecting HSA programs to the many requirements of the Employee Retirement Income Security Act.
EBSA announced in the first batch of HSA guidance, released in 2004, that HSA program sponsors could avoid coming under ERISA requirements.
To stay clear of ERISA, HSA program sponsors must be careful not to require employees to contribute to the plans or limit employees’ ability to move funds from one HSA to another.
Sponsors of non-ERISA HSA programs also must refrain from interfering with employees’ HSA investment decisions, describing their HSA programs as employee welfare benefit plans, or receiving payments or compensation in connection with the HSA program.
Many responses in the new field bulletin elaborate on the procedures employers must or must not take to keep HSA programs out of the scope of ERISA.
Simply paying employees’ HSA account fees or limiting the number of HSA vendors that can market their services at the employer’s worksite will not turn an HSA program into an ERISA plan, Doyle writes.
An HSA vendor can offer its own HSA product to its own employees without coming under the provisions of ERISA, and a vendor can attract HSA business by putting cash incentives into the HSAs, Doyle writes.