Groom provides comprehensive and interdisciplinary Individual Retirement Account (IRA) and Health Savings Account (HSA) advice drawing together the often complex web of prohibited transactions and income tax laws; state and federal securities, banking and insurance laws; ERISA and other disciplines.  We offer extensive experience in all of the following areas:

Issues involving the marketing and servicing of “retail” IRAs by large financial institutions including banks and trust companies, broker-dealers, insurance companies and investment managers.

  • SEC Regulation BI and potential Department of Labor guidance to replace the vacated DOL Fiduciary Rule, as well as state sponsored “fiduciary” rules.
  • Prohibited transactions and applicable exemptions.
  • “Rollovers” from qualified retirement plans.
  • Investment advisory and management services including “robo-advice” and issues relating to independent adviser networks.
  • Compensation issues including revenue sharing, payment for order flow and shelf-space payments.
  • Sweep arrangements including FDIC-insured “waterfall” programs and broker free credit.
  • Bulk “transfers” of IRA custody and servicing agreements via negative consent.
  • Drafting and obtaining IRS approval of IRA documentation.
  • Tax reporting requirements.
  • Creating internal compliance policies.
  • Relationship pricing, “householding” and bonus award programs.

Issues for custodians and service providers in the “self-directed” IRA marketplace.

  • Obtaining IRS non-bank custodial approvals and advising on custodial net worth and audit requirements and IRS examinations of custodians.
  • “Best practices” for dealing with alternative and hard-to-value assets.
  • IRS audit and enforcement issues, including “correction” of prohibited transactions.
  • Unrelated business income tax issues.
  • Complying with exemptions from broker-dealer or investment adviser registration requirements.
  • Avoiding and defending class action litigation by IRA owners and beneficiaries.

IRA issues in the family office and ultra-high-net-worth space.

  • Prohibited transaction and “plan assets” issues – including dealing with the extraordinarily complex family and corporate “attribution” rules – relating to coinvesting family moneys in alternative investments such as venture capital, real estate, private equity, hedge funds, credit facilities, etc.
  • Investments by private fund principals and employees in their own funds.
  • Formation and operation of private/family trust companies and their use for IRA investing.
  • IRA-owner income tax issues and IRA unrelated business income tax (UBIT) issues including the use of “blocker” entities and state tax law ramifications.
  • Creditor and bankruptcy protection considerations.

HSA issues for financial institutions, health insurers/administrators and employers.

  • Types of coverage that can be offered alongside an HSA on a first dollar basis without impacting eligibility.
  • Issues regarding how HSA funds are held by financial institutions and whether commingling is permitted.
  • How to determine what date an HSA is “established” for purposes of allowing HSA distributions on a tax-free basis.
  • How enrollment Medicare Parts A and B impact HSA eligibility and how to defer enrollment.
  • Obtaining non-bank custodial status from the IRS for HSA administrators.
  • Assisting with the migration of HSAs from one custodian to another.
  • Navigating state laws that impact HSAs.
  • Correction of coverage mistakes involving High Deductible Health Plans (such as inadvertently setting a deductible lower than the required minimum).
  • Setting up lines of credit for HSA account holders in a compliant manner.
  • Addressing issues involving pharmacy manufacturer rebates and coupons that may impact HSA eligibility.
  • Drafting and negotiating HSA agreements between employers and HSA administrators, HSA administrators and financial institutions, and HSA custodians and account owners.

Click here to be added to our mailing list for IRA and HSA-related notices and updates.