Healthcare consumers now have another online shopping option for saving on hundreds of qualified healthcare products with their FSA or HSA benefit cards. Online retailer Amazon.com is now accepting payments from these benefit accounts for eligible expenses. With this move, Amazon has joined FSAStore, Walgreens, and CVS, among other retailers, in the consumer directed healthcare (CDH) market.
The Amazon Impact on CDH Account Awareness
Amazon’s entry into the healthcare space could have a big impact on increasing awareness for these two benefit accounts.
Employee Benefits News reports that HSAs are significantly underused. Currently, more than half of all Americans who get healthcare insurance through their employer have a high-deductible plan (HDHP) – a key requirement for participating in an HSA. Yet, only about 22 million are enrolled in one. Of those that have an HSA offered by their employer, less than half contribute to it throughout the year.
The FSA and HSA advantage
As part of consumer directed healthcare, HSAs and FSAs are powerful tools for lowering out-of-pocket healthcare costs. Both accounts allow workers to set aside money pre-tax to pay for a wide range of qualified expenses. Whether an employee has an FSA or HSA, they can reduce their taxable income by thousands of dollars annually by contributing the full amount.
FSAs, which have no health insurance plan requirement, allow participants to set aside up to $2,700 in 2019. Depending on the plan setup, an FSA may have “use-it-or-lose-it,” a grace period, or up to $500 rollover at the end of the plan year. Otherwise, any unspent funds go back to the employer. The plans are owned and controlled by the employer, so if an employee leaves the company, the FSA stays behind.
In contrast, HSA plans are owned by the employee. The money in an HSA stays with the participant for life or until it’s used. Currently, those enrolled in an HDHP can set aside a maximum of $3,500 a year into their HSA; those with family coverage can contribute up to $7,000. In addition to paying for approved healthcare expenses, the account owner can also earn interest on their account balance or invest the funds without paying taxes on the earnings; this makes HSAs an excellent retirement vehicle.
How FSA or HSA Benefit Cards Work on Amazon.com
Shopping with an FSA or HSA card offers simple, convenient access to benefit dollars. Plus, it helps reduce the amount of reimbursement claims a participant has to submit. To purchase qualified products using HSA or FSA funds on Amazon, shoppers must pay with their FSA or HSA benefit cards.
So how does an account holder use the new program? After creating an Amazon account, participants need to log in and add the benefits card as a payment option. In addition to the cost of the product, benefit dollars can also cover the sales tax and shipping.
If an account holder has multiple payment options set up (benefits card and other card), Amazon offers a time-saving perk that allows eligible and ineligible items to be purchased at the same time. Amazon’s system logic will charge the correct product and amount to each card or payment method.
Amazon Product Eligibility Labels
Employees can use HSA and FSA funds for hundreds of healthcare products ranging from insulin pens and catheters to blood pressure kits, glucose monitors and sunscreen. However, not all healthcare products listed on Amazon qualify as HSA or FSA approved purchases. To make it easy for shoppers, Amazon displays an “FSA or HSA Eligible” label on all qualified product pages.
Click here for a complete list of eligible products.
Over-the Counter Medications Not Covered
Per IRS Publication 502, over-the-counter medications require a prescription to be eligible for purchase with an FSA or HSA. As such, Amazon’s program does not support such purchases. People may buy over-the-counter drugs on the Amazon platform, but must pay out-of-pocket.
As more companies offer FSAs and HSAs to boost benefits packages and keep costs down, healthcare consumers will want more ways to save on their personal healthcare expenses. Amazon’s jump into this arena can have a significant impact on how people spend their benefit dollars. Now those who like to shop online with FSA or HSA benefit cards have another option.
DataPath, Inc. is a leading technology provider for healthcare benefits administration, including end-to-end processing for FSA and HSA debit cards.