The Department of Labor has issued Field Assistance Bulletin 2004-1 (“FAB”), providing some important guidance pertaining to the application of Title I of ERISA to health savings accounts (“HSAs”). Here is what the DOL had to say in the FAB:
Congress, in enacting the Medicare Modernization Act, recognized that HSAs would be established in conjunction with employment-based health plans and specifically provided for employer contributions. However, neither the Medicare Modernization Act nor section 223 of the Code specifically address the application of Title I of ERISA to HSAs. Based on our review of Title I, and taking into account the provisions of the Code as amended by the Medicare Modernization Act, we believe that HSAs generally will not constitute employee welfare benefit plans established or maintained by an employer where employer involvement with the HSA is limited, whether or not the employee’s HDHP [High Deductible Health Plan] is sponsored by an employer or obtained as individual coverage.
Again, the issue is employer involvement (as discussed in a previous post) and whether the particular benefit offered meets the exception under 29 C.F.R. § 2510.3-1(j)(1)-(4). Here is how the DOL decided to define employer involvement with respect to HSAs, as noted in their FAB:
Specifically, HSAs meeting the conditions of the safe harbor for group or group-type insurance programs at 29 C.F.R. § 2510.3-1(j)(1)-(4) would not be employee welfare benefit plans within the meaning of section 3(1) of ERISA. . . [W]e would not find that employer contributions to HSAs give rise to an ERISA-covered plan where the establishment of the HSAs is completely voluntary on the part of the employees and the employer does not: (i) limit the ability of eligible individuals to move their funds to another HSA beyond restrictions imposed by the Code; (ii) impose conditions on utilization of HSA funds beyond those permitted under the Code; (iii) make or influence the investment decisions with respect to funds contributed to an HSA; (iv) represent that the HSAs are an employee welfare benefit plan established or maintained by the employer; or (v) receive any payment or compensation in connection with an HSA.