Finpago, WageWorks Partner To Enable FSA Debit Card Use

For most retailers to accept FSA Debit Cards for OTC and pharmacy purchases, the IRS has ruled that each line item of the purchase must be confirmed as “eligible” before the money is spent. IRS Rulings 2006-69 and 2003-43 provide a clear path forward for mass merchants and grocery stores who conduct many of the nation’s pharmacy and OTC transactions, permitting them to participate in this $5 billion pharmacy market segment, and enhancing convenience for consumers who prefer to shop at their favorite retailers.

“As consumer driven health care gains momentum, convenient and instant access to health care accounts and health care account funds will continue to be a critical component for driving adoption and growth. We are willing to go merchant by merchant to insure the best possible employee experience. The tools offered by Finpago make it easier for us to communicate with health care merchants and capture health care transaction data, which translates to a better overall experience for the consumer,” said Brandon Wood, Director of Health Care Product Management for WageWorks ®, the nation's leading provider of consumer-driven tax-advantaged spending accounts for health care, dependent care and commuter benefits.

The FSAok clearinghouse service is a complete solution for automating pharmacy and over-the-counter (OTC) medication purchases made with FSA debit cards. There are no extra steps for the consumer – whenever they shop at a member pharmacy, grocery, or mass merchant, they just present their existing FSA debit card. The FSA Debit card simply works in more places and “works better” because they don’t have to send in receipts. FSAok does it for them. Retailers choose the FSAok Debit Substantiation service that best meets their needs. A simple integration with FSAok software will automate electronic claims through Finpago’s clearinghouse. Or to automate in-store separation of eligible purchases, they can choose to implement the FSAok Real-Time Eligibility Engine through an integration with their point-of-sale systems. In either case customers benefit from an easy check-out experience.

WageWorks has chosen FSAok Debit Substantiation to improve the convenience and timeliness of claims for WageWorks’ FSA participants, and to maximize the locations where debit cards can be used. “We are pleased to be working with Finpago to maximize the acceptance our debit cards,” said Brandon Wood, Director of Health Care Product Management at WageWorks. “We see FSAok services as delivering significant convenience to our FSA participants who are shopping at retailers using the Finpago solution.”

How It Works

With each eligible purchase, FSAok automatically delivers a detailed electronic receipt for pharmacy and OTC purchases to the customer’s FSA benefits administrator, so the drugstore, grocery and mass merchant retailer can make their customer’s experience easy, and meet the employers purchase substantiation requirements for IRS Notice 2006-69. With this service, FSAok member retailers can accept more FSA debit cards, encouraging customers to shop there for all of their FSA-eligible items. For retailers that choose to integrate their in-store point of sale systems, only FSA-eligible items will appear on the card.

“In today’s busy world, consumers want choice – and they want things to be easy,” said Fred Hawkins, CEO of Finpago, Inc. “Now with FSAok Debit Substantiation, consumers will be able to purchase their prescriptions from their preferred retailer while receiving the tax benefit. To top it off, our service makes shopping even easier by delivering electronic receipts and claims to their administrator for over-the-counter medication purchases . . . it’s simple.”

“Consumers with pretax healthcare spending and savings accounts want to be able to have a choice of where they shop, and expect to use their debit cards for all qualified expenses, not just pharmacy,” said Wood. WageWorks believes that FSAok Debit Substantiation is cost effective, a faster way to reach to more retailers, and a real convenience for account holders. “Our philosophy is to make healthcare spending accounts easy and convenient, which increases consumer satisfaction and drives adoption. WageWorks chose FSAok because for FSA eligible in-store purchases it delivers on that goal.”