Prepaid Health Care Cards Gain Consumer Support: Survey Finds Consumers Want Prepaid Health Care Cards to Reduce Hassles, Paperwork and Out-of-Pocket Expenses

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A recent survey about paying for health care found that a new tool is improving the process of health care spending and reimbursement. The survey, commissioned by the Network Branded Prepaid Card Association (NBPCA) and conducted by Kupersmit Research, found that consumers with prepaid health care cards, as part of their flexible spending account (FSA), were far more satisfied with being able to easily and efficiently pay for eligible health care expenses.(a) Eighty-one percent of respondents who have a prepaid health care card are extremely or very satisfied with their FSA versus 66% of FSA users without a prepaid health care card. The NBPCA is a non-profit, inter-industry trade association created in 2005 to advance the success of network branded prepaid cards.

Prepaid health care cards with an FSA are a win-win for the employee and the employer

    An FSA is an IRS-approved employee benefit provided by an employer. It allows employees to set aside part of their pre-tax wages to pay for eligible medical expenses not covered by insurance such as co-payments, eyeglasses and dental care.

The NBPCA survey also uncovered consumers' most pressing health care concerns. Along with the rising cost of health care expenses, consumers' top concerns included making sure they pay the right amount for expenses and deductibles, getting the correct reimbursement amount from insurance, submitting receipts and dealing with the paperwork to get reimbursed.

"Eighty percent of consumers say the process of submitting receipts and being reimbursed is overly cumbersome. This means that thousands of people may be leaving money on the table because the process is burdensome," said Marilyn Bochicchio, NBPCA President and Executive Director. "Prepaid health care cards solve the payment and reimbursement inconveniences. They give consumers a tool to save time, paperwork and headaches."

Prepaid health care cards make it easier and more convenient to access funds in FSAs.

Prepaid health care cards carry a major brand logo (American Express, Discover, MasterCard or Visa). They can be used to pay for eligible medical expenses including co-payments at the doctor's office and medication purchased online or at the pharmacy. In many cases, you can even use FSA funds to purchase over-the-counter (OTC) products as well. With a prepaid health care card, funds are automatically deducted from the FSA and paid to the health care provider or store. For employees, this means no out-of-pocket payments, little or no paperwork to submit, and no waiting for reimbursement. Funds remaining in an FSA at the end of the year expire and are no longer available to the cardholder, so it is important to plan contributions wisely and use FSA funds to pay for all eligible medical expenses.

Employers gain an edge with prepaid health care cards.

Major employers have adopted prepaid health care cards as part of their FSA plan because of cost savings and tax benefits to both the employee and employer. The recent NBPCA poll found that two thirds of consumers would be more favorable to a company's benefits package if it offered a prepaid health care card.

"Prepaid health care cards with an FSA are a win-win for the employee and the employer," said Bochicchio. "Many employers have adopted this tool over the past five years, and I expect we will see more and more employers do the same as they continue to recognize the potential cost savings and understand the tremendous benefit it offers to them and their employees."

Tips for using a prepaid health care card with an FSA:

-- Use the card, like any other branded payment card, to access the funds in your FSA to pay for eligible medical expenses. Use your card for every eligible medical expense to avoid having funds left over at year-end.

-- Carry your FSA card with you at all times, and get a card for your spouse and/or dependents and make sure they carry it with them as well.

-- Use your card to pay for prescriptions or co-payments for medications purchased online, at pharmacies and even at some retail locations that offer OTC products.

-- If your card is lost or stolen, report it immediately. Funds are protected from loss or theft just like other branded cards.

-- Save receipts in case there is ever a question about whether an expense falls into the eligible category.

-- If your employer offers an FSA but doesn't offer a prepaid card, ask about adding this benefit.

(a) This survey was conducted online among 402 individuals who describe themselves as the primary (52%) or shared (48%) decision-maker in the household. The margin of error is +/- 4.9%. Interviews were conducted October 24-27, 2006.

About the NBPCA

The Network Branded Prepaid Card Association (NBPCA) is a nonprofit, inter-industry trade association that supports the growth and success of network branded prepaid cards and represents the common interests of the many players in this new and rapidly growing payments category. The NBPCA's Working Groups drive the activities of the Association for its more than 30 members. For additional information, visit

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