More and more Americans use physical and virtual credit/debit cards and digital payment solutions instead of cash. Employees increasingly demand card-based methods to access their benefit funds, and employers naturally want their workers to be happy with their benefits. Growth-minded TPAs will offer card access as much as possible on current benefit programs and be open to other payment solutions as technology evolves and regulations permit.
Why Offer Debit and Credit Cards?
American employers can offer a wider variety of benefits than ever before. Offering card-based access to benefit funds facilitates the adoption and use of these programs.
Benefits for Employees
Recent research shows that 85% of employees are confused about their benefits options. This can lead to lower enrollment or underutilization once enrolled. Participants also may be unable to afford to pay out-of-pocket and then wait for reimbursement approval and receipt of funds. A debit card option can effectively address these concerns.
Benefits for Employers
Making it easy for employees to use health and wellness funds has many benefits. In addition to making them happier, it can help them be healthier, which may result in higher productivity. Debit cards also eliminate the risk of lost or stolen checks.
Benefits for TPAs
Merchant Category Codes (MCCs) and Inventory Information Approval System (IIAS) restrictions associated with benefits debit cards can dramatically reduce adjudication needs for participant claims, reducing TPA operating costs.
Other Payment Solutions
While physical and virtual debit cards offer various benefits, they may not suit everyone. Over 53% of people prefer digital wallets over more traditional payment methods. As technology evolves, we will see the introduction of innovative benefits payment solutions such as unique interfaces that automatically deduct funds from benefit accounts during checkout, biometrics, and digital currencies.
Leverage New Opportunities
As we grow closer to a cashless society, participants will seek more payment options to successfully and easily use their employer-sponsored benefits. TPAs who embrace evolving payment technologies will see their business grow through increased adoption, utilization, and client satisfaction.
DataPath, Inc. has been a full-service TPA business solutions provider for nearly four decades. Our cloud-based Summit platform is the industry’s first all-in-one solution for CDH, HSA, Well-Being, COBRA, and Billing administration; plus, we offer comprehensive Operations BPO and award-winning Marketing Services for users of all administrative platforms. Please enter your email (above right) to be notified when new blog articles are published.