Today’s reality highlights the need for benefits debit cards: in a 21st century, first-world society, card payments are the norm rather than the exception. Card payment terminals are found just about everywhere – doctors’ offices, pharmacies, grocery stores, retail shops, taxicabs, subway stations, and more. With consumers utilizing debit and credit cards more and more each day, the convenience and security of card payment solutions is overtaking more traditional payment methods such as cash and check. Therefore, when it comes to employer benefits packages and consumer driven healthcare, an account-linked benefits debit card makes sense.
In addition to incentivizing plan enrollment for employers, benefits debit cards can also streamline the process by reducing the need for extensive account administration and claims filing. Thankfully for employers and employees alike, a benefits debit card can link to just about any employer-sponsored benefit account.
With a Flexible Spending Account (FSA), employees can use the card in-store and online to pay for IRS-approved medical-related expenses. Some retailers, such as Walgreens and FSAStore.com, clearly identify FSA-approved items, and some card processors offer auto-adjudication for those purchases. This makes it easy for card holders to know where their FSA funds are going, and the restricted purchasing ensures they aren’t using their funds for non-approved expenses. In addition, if an account holder has a Dependent Care FSA, they can use the card at their childcare provider to pay for those costs.
Employers that offer Health Reimbursement Arrangements (HRAs) can add a card to those types of accounts. Card holders can use the card to pay for pre-approved expenses, rather than paying out of pocket and filing for reimbursement. This can reduce the need for extensive claims filing which is burdensome on both the employer and the employee.
Health Savings Accounts (HSAs) can also be linked to a debit card. With HSAs, anyone can fund the account and the debit card enhances the convenience of accessing account funds. A debit card for an HSA can be particularly useful for account holders enjoying rollover at years’ end, which can result significant account growth. Furthermore, since the employee owns the HSA, offering a debit card can enhance account enrollment and usage.
In addition to the big three – FSA, HRA, and HSA – there are two other types of benefits accounts that can be linked to a debit card.
Transit accounts are very popular in many major metros around the US, and in some cities employers are required to offer a Transit option. Employees with a Transit account can use their cards to pay for commuter expenses quickly and easily and can reduce the need to file claims for reimbursement. DataPath offers terminal restrictions in many major metros, which makes it easy for commuters to use their cards and receive spending authorization when the card is used where only fare media is sold.
Workers’ compensation can also be tied to a benefits debit card. When employers utilize debit cards to issue workers’ comp payments, they ensure that the remote worker receives the payment and can access the money anytime, anywhere. In addition, the reloadable debit card eliminates the need for writing costly checks which can be slow and are vulnerable to fraud.
Consider offering a debit card to your employer-sponsored benefits package. The need for secure, convenient access to funds with the rise of consumer driven healthcare makes it a no-brainer.