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January 2024  Volume 22, Number 1        

credit card for medical

Healthcare Credit Cards: The Employee Benefit That Pays You Back

As healthcare costs continue their meteoric rise, employees are struggling under the weight of medical expenses. But a novel new benefit offers employers a way to attract top talent while empowering staff to manage costs.

The High Price of Healthcare

American healthcare is notoriously expensive. Costs are projected to jump by 8.5 percent in 2024 alone, according to predictions by benefits consulting firm Aon.

Inflation and shrinking savings make the financial hit even harder for many households. Per a LendingClub and PYMNTS report, 60 percent of U.S. adults already live paycheck-to-paycheck.

Meanwhile, a GoBankingRates survey revealed nearly 33 percent of respondents have $100 or less in their savings account, compared to just 22 percent last year.

With consumers drained by inflation and healthcare costs expected to balloon in coming years, innovative benefits are needed to prevent Americans from avoiding or delaying necessary care.

HSAs and FSAs Fall Short

Some employers have turned to health savings accounts (HSAs) and flexible spending accounts (FSAs) to empower staff to save and pay for medical expenses.

However, these accounts have limitations. With HSAs, employees must meet lofty plan deductibles — at least $1,500 for an individual or $3,000 for a family — before insurance coverage kicks in. Staff might lack the funds to even make a dent.

FSAs also pose challenges. Employees risk over-or under-funding accounts trying to predict the coming year’s medical costs. Plus, any unspent FSA money is forfeited at the end of the year.

Between unpredictable expenses and forfeiture risks, traditional medical accounts often fail to provide real relief.

HPA Benefits: Buying Time, Empowering Employees

Enter the healthcare payment account (HPA), an employer-provided line of credit that equips staff with a medical Visa card.

Employees can use their HPA for any necessary care and then repay the balance through automatic installments. There is no interest or fees.

This gives financially pinched households flexibility when the unexpected strikes. Rather than drain savings or rack up interest charges on a personal credit card, staff can pay for healthcare and then make interest-free HPA payments over time.

Experts say HPAs enhance employee autonomy and empower people to access vital care when needed most. The accounts provide a simple and easy way for staff to take control of healthcare costs rather than avoiding doctor visits due to financial limitations.

HPAs also integrate seamlessly with HSAs and FSAs: Any funds in those accounts can be utilized to make HPA payments.

A Fast-Growing, Win-Win Offering

While HPAs represent a relatively new approach, adoption is already widespread and poised for massive growth.

Over 1,200 employers and health insurance providers currently offer an HPA option, evidence the concept has gained quick traction.

The appeal for organizations is clear. HPAs provide a powerful talent draw while supporting worker health and wellbeing.

And with employers footing the cost through reasonable monthly fees, accounts are budget-friendly to implement. They require no employee contributions or credit checks.

For staff, HPAs alleviate financial stressors that can negatively impact health, engagement and performance. Employees keep access to vital care while avoiding predatory lending products that exploit vulnerability.

In essence, the accounts enhance peace of mind for employers and employees alike. Both sides reap rewards from the equitable arrangement.

Staying Competitive in Challenging Times

Today's talent market remains cutthroat even amid hiring pullbacks. Skilled workers have options, and competitive benefits packages are a key differentiator.

With HPAs representing an affordable, creative offering, now may be the time to pilot this innovative medical account solution.

As economic pitfalls persist alongside runaway healthcare costs, medical payment accounts enable the flexibility and empowerment every stakeholder craves. Ultimately, that resilience can translate into a healthier, more committed workforce prepared to drive your organization forward.

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In this issue:

This Just In ... More Tax-Free Money for Medical Costs: IRS Raises 2024 Health FSA Cap

Sick Days Have Doubled, but Morale Is Up

New Solutions for Employee Mental Health

Healthcare Credit Cards: The Employee Benefit That Pays You Back

Government Tips for Accurate EEO-1 Reporting



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