July 21, 2015

Phyllis C. Borzi

Deputy Secretary

Employee Benefit Security Administration 

Department of Labor

200 Constitution Avenue, NW

Washington, DC 20210

 

Submitted via the Federal Rulemaking Portal www.regulations.gov 

Re: Fiduciary Standard Proposed Rule RIN 1210-AB31

Dear Ms. Borzi:

I am writing on behalf of the National Association of Health Underwriters (NAHU), a professional 

association representing more than 100,000 licensed health insurance agents, brokers, general agents, 

consultants and employee benefit specialists nationally. We are pleased to provide comment on the 

proposed rule concerning revisions to the definition of the term fiduciary and conflict of interest 

standard concerning retirement investment advice that that was published in Volume 80, number 75 of 

the Federal Register on April 20, 2015.

The members of NAHU work on a daily basis to help millions of individuals and employers purchase, 

administer and utilize health insurance coverage, including the increasingly popular employer group 

benefit option of qualified high-deductible health plan coverage coupled with a Health Savings Account 

(HSA). We are writing to express our significant concern that this rule, as proposed, will have a chilling 

impact on employee access to HSAs. By expanding the definition of plan fiduciary to potentially cover not 

only service providers who assist employers and employees with Individual Retirement Account (IRA) 

options, but also those who assist with HSAs and Archer Medical Savings Accounts (MSAs), including 

providing advice on a one-time basis, this proposed rule creates unprecedented new compliance 

responsibilities and liabilities for employers and licensed health insurance agents and brokers. NAHU is 

very concerned that employers and health insurance agents and brokers will be unwilling to accept this 

new liability and will instead simply eliminate group HSA access for millions of Americans in favor of 

other benefit options that may be less advantageous to employees. Our association believes it is 

inappropriate to cover and treat HSAs and MSAs under the proposed regulation in a manner similar to 

IRAs as to both coverage and applicable carve-outs. We urge you to eliminate them from the scope of the 

final rule.
While health reform has brought employers, employees and even licensed health insurance agents and 

brokers many new opportunities and protections, it has also made group health plan administration 

significantly more expensive and complicated for employers and their licensed benefit advisors. 

Furthermore, health reform has led to revised employer plan designs with an increased emphasis on 

high-deductible plan choices for people participating in group health benefit arrangements. As employers 

and their licensed agents prepare for the coming implementation of the Patient Protection and Affordable 

Care Act’s (ACA) health plan excise tax, the inclusion of high-deductible plan offerings in group health 

plan arrangements is expected to markedly increase. Coupling a qualified high-deductible plan with an 

HSA is currently a very popular option amongst both employers and employees to offset high employee 

out-of-pocket costs and encourage responsible consumerism. According to America’s Health Insurance 

Plans’ (AHIP) survey data, over 16 million Americans were enrolled in qualified high-deductible health 

plans paired with an HSA via an employer group benefit arrangement in 2014. Since the ACA was passed, 

this market segment has experienced an average growth of 15% per year.1 

If the Department of Labor expands the fiduciary standard rules to cover service providers who help

facilitate group HSA establishment and contributions, NAHU is concerned that employers and licensed 

agents and brokers will be inclined to eschew the HSA option for employees in favor of other benefit 

designs due to the new complexity and liability that will be associated with HSAs. We predict that 

employers will either eliminate the account-based component (and associated employer contributions) 

of their high-deductible offerings or favor Health Reimbursement Arrangements (HRAs) to help 

employees offset higher out-of-pocket costs. While HRAs do have numerous advantages for employers 

and can help decrease high cost-sharing responsibility for employer plan participants, HRAs have far 

fewer direct benefits to employees because the funds are purely owned and controlled by the employer. 

Therefore, there are no savings benefits or tax advantages for the employee and there are also fewer 

general market benefits relative to medical care spending because the employee has little to no incentive 

to practice responsible consumerism. If the proposed rule stands as is, NAHU believes the end result will 

not be increased investment advice protections for HSA holders, but instead a loss of HSA access and 

support for millions of American employer plan participants. 

For employers, the proposed rule would make it much more complicated to ascertain whether financial 

service providers meet the standard of a plan fiduciary by expanding the qualifying test in three ways. In 

addition, by expanding the scope of applicable products to include HSAs and MSAs for the first time, the 

proposed rule would require employers to determine whether their group health insurance broker met 

the test and then ensure that the broker met fiduciary liability standards should their service provider 

qualify. Given all of the other new requirements that employers need to follow in a post-ACA world –

including complicated new plan rules, employer shared responsibility requirements, substantial 

 1

AHIP Center for Policy and Research, 2005. “2014 HSA/HDHP Census.”
employer reporting burdens and the looming excise tax – no group plan sponsor needs to add additional 

complications to their benefit offerings. The proposed rule would incent employers to drop their HSAcompatible coverage options and group HSA account support as an employee benefit in favor of other 

options requiring less compliance responsibility and liability, even though those options might be less 

financially advantageous for employees. 

For most licensed health insurance agents and brokers who routinely sell and service employer group 

qualified high-deductible health plan products that can be combined with HSAs, the proposed rule would 

expand their potential liability into completely new territory. While some health insurance agents and 

brokers also work in the traditional group retirement benefit market, many do not sell or service 

retirement plan products and are therefore unfamiliar with retirement account fiduciary standards. For 

these agents, the proposed rule could require completely different business standards, interactions, 

contract structures and payment methodologies with their clients. Based on NAHU’s analysis of the 

proposed rule, it does seem that many brokers who sell and service HSA-compatible group health 

insurance products and facilitate related HSA establishment and contributions now might be able to 

avoid triggering fiduciary responsibility by limiting the amount of information and education they give to 

employees about HSAs. However, the triggering standard with regard to the kinds of education that can 

be provided to plan sponsors and participants is vague and confusing and many licensed agents will be 

unwilling to accept the potential risk. Further, if fiduciary liability is triggered, then so are conflict-ofinterest standards, compensation limitations and the “best interest contract” exemption, all of which 

would dramatically affect a health insurance broker’s current business and payment norms. Given all of 

the additional responsibility and compensation changes and challenges licensed health insurance agents 

have had to endure over the past five years of health reform implementation, we know that our members 

have no interest in increasing their potential exposure or further limiting their compensation for 

providing employers and employees with service and advice. Instead, we believe that this rule would 

force agents and brokers to consider other product options for their clients.

Finally, in addition to our concern about the potentially devastating impact this proposed rule could have 

on the group HSA marketplace, NAHU does not believe that HSAs and IRAs are similar enough products 

for the Department of Labor to propose regulating their service providers in the same manner. While HSA

funds can be used to fund medical costs and other expenses in retirement, they are typically low-balance 

accounts used and viewed by employees as a shield against high out-of-pocket costs in their current-year 

medical plans. According to the Employee Benefit Research Institute, employee balances in HSAs 

averaged $1,766 in 2013, with the average balance ranging from $697 for an account owner under 25 to 

just $4,460 for individuals at retirement age of 65 and older. Eighty percent of Health Savings Account 

holders took account distributions in 2013 for medical expenses, with the average amount of the 

distribution being $1,953.2 All of this data supports the market observations of our nation’s licensed 

 2 Employee Benefit Research Institute, June 2014. “HSA Balances, Contributions, Distributions, and Other Vital Statistics—A First Look at Data from the EBRI 

HSA Database on the 10th Anniversary of the HSA” EBRI Issue Brief #400. 
insurance brokers that Americans do not typically view their HSA funds as part of a long-term retirement 

investment strategy, but rather as a source of funds to cover current and short-term medical costs. As 

such, NAHU does not believe it is appropriate for the Department of Labor to treat HSAs and MSAs in the 

same manner as IRAs with regard to conflict of interest and fiduciary standards. To preserve the group 

HSA marketplace and protect employee access to the HSA option and its many benefits, NAHU urges you 

to exclude HSAs and MSAs from the scope of the final rule. 

NAHU sincerely appreciates the opportunity to provide these comments on the proposed rule. If you have 

any questions, or if NAHU can be of further assistance to you, please feel free to contact me at 202-595-

0787 or jtrautwein@nahu.org. 

Sincerely,

Janet Trautwein

Executive Vice President and CEO

National Association of Health Underwriters