Employees, employers and TPAs all find value from a strong employer benefits package. Employer-sponsored debit cards can further bolster benefits offerings.
In today’s fast-paced world, debit cards provide an efficient payment method for consumers everywhere. They eliminate the time and hassle involved in writing checks or stopping at the ATM to get cash. Purchases are automatically tracked by the card provider, and can be easily viewed and managed online by the card holder. Additionally, debit cards are accepted all over the world.
For Third-Party Administrators (TPAs), account-linked debit cards can help control costs through more efficient benefits administration. Many TPA clients, who are savvy employers, are now incorporating them into their employee benefits offerings. This helps companies attract and retain a talented workforce through a strong benefits package. Employees, looking to make quick, convenient payments and file fewer claims, find it easier to use a debit card for out-of-pocket healthcare expenses.
Advantages of Employer-Sponsored Debit Cards
Benefits to TPAs
Benefits debit cards help TPAs in several important ways including less time and cost for administration, greater plan flexibility, and boost life counts.
- Reduced administrative time and expense. Healthcare and benefits debit cards reduce claims filings and streamline the account administration process.
- Payment flexibility. Employer-sponsored debit cards can link to most types of benefits accounts, including Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs).
- Plan enrollment incentive. Benefits debit cards encourage employees to enroll in employer-sponsored healthcare plans by making it easier to pay for eligible expenses.
Above all else, companies want to attract talented people and keep them around. A strong benefits package goes a long way towards achieving this. In addition to the benefit accounts themselves, adding an account-linked debit card, which is not only convenient but also secure, is a way to enhance their benefits package.
Plus, an account-linked debit card promotes the safe, secure transfer of funds. Depending on plan design, employers can electronically deposit money into employee accounts, eliminating the risk of lost or stolen checks.
For employee-participants, convenience is the number one benefit. Healthcare benefits debit cards can be used to pay for a wide variety of eligible healthcare expenses. In addition, workers get immediate access to funds, and can thereby avoid the time and effort of submitting claim forms and waiting for reimbursement. Employees can also track their card usage online to see how their funds are being spent.
Employer-sponsored debit cards work well with the three main types of healthcare benefit accounts:
- FSAs. Employees can use their account-linked debit card to pay for IRS-approved medical expenses. Many retailers identify their FSA-approved items to help prevent misuse of funds on non-approved expenses.
- HRAs. Using a benefits debit card to pay for pre-approved expenses eliminates the hassle of paying out-of-pocket and filing for reimbursement. It also avoids the problem of delaying or forgetting to submit reimbursement claims.
- HSAs. Benefits debit cards simplify the process of accessing HSA account funds – an especially useful feature for account holders who roll over unused funds at the end of each year.
IIAS Security Features
Many TPAs partner with a platform provider that offers Inventory Information Approval System (IIAS) technology on their debit cards. When a plan participant uses their employer-sponsored debit card at a merchant who uses IIAS, the system automatically:
- Verifies the eligibility of employee expenses and approves or denies the card swipe at the point of sale
- Verifies that employees are actively enrolled in the plan before approving a transaction
- Checks the employee’s account balance to ensure it has sufficient funds to pay for the transaction
This helps reduce fraud and ineligible expense use. It also can also help cut down on claims filing, which results in fewer claims adjudication for TPAs.
Covering New Types of Expenses
As benefits debit card usage continues to grow, employers have begun expanding the types of expenses their debit cards cover. For example, many employers now use debit cards to make workers’ comp payments. The ability to automatically reload the card cuts down on administrative time and enables workers to access their workers’ comp payments anytime, anywhere. Employers in large cities are also adding a transit option that enables employees to pay for approved commuter expenses with their benefits debit cards.
As consumer-driven healthcare continues to grow, so does the need for employees to have convenient access to funds to pay for their medical expenses. Employer-sponsored debit cards offer a safe, secure solution that provides tremendous value to TPAs, employers, and employees, for a wide variety of reasons.