Finpago to the Rescue for Mass Merchants

The landscape of automatingpharmacy purchases has changedbecause of the InternalRevenue Service (IRS) 2006-69 notice.As stated in the notice, the US Treasuryhas determined that the most commonmethods of automating flexible spendingaccount (FSA) debit pharmacy purchaseswill no longer work at mass merchantsand grocers because thesestores are deemed not "health carerelated retailers." The change effectivelyexcludes the group from a $5-billionpharmacy market—a major loss of conveniencefor consumers who want toshop for prescriptions at their favoriteretailers.

Finpago Inc has devised a solution—the FSAok Debit Substantiation service.The FSAok clearinghouse service is atotal solution for automating pharmacyand OTC medication purchases madewith FSA debit cards. FSAok automaticallydelivers a detailed electronicreceipt for pharmacy and OTC purchasesto the consumer's FSA benefits administratorwith each eligible purchase.Now drugstore, grocery, and mass merchantretailers can make their consumers' experience easy, whileenabling the employer to meet its purchasesubstantiation requirements outlinedby the IRS.

Fred Hawkins, Finpago's chief executiveofficer, came up with the concept2½ years ago. "In today's busy world,consumers want choice—and theywant things to be easy," he said. "Nowwith FSAok Debit Substantiation, consumerswill be able to purchase theirprescriptions from their preferredretailer while automatically receivingthe tax benefit. To top it off, our servicemakes shopping easier by deliveringelectronic receipts and claims to theirFSA administrator even for OTC medicationpurchases."

The Conshohocken, Pa-based companyalso has introduced the FSAokAnyCard service. The service providesconsumers with the ability to shop withtheir preferred credit, debit, or frequentshopper cards as they normally do andhave their eligible FSA purchases automaticallyselected and submitted for aclaim and backed by an electronicreceipt. Before the advent of the FSAokAnyCard service, consumers had totediously copy their receipts, fill outclaim forms, and experience regulardisappointment from unmet promisesof convenience.

"Consumers are the big winnershere. All they need to do is register andtell us how they normally like to pay;FSAok AnyCard automatically collectsthe electronic receipts and submitsclaims for eligible items.We made FSAsgoof-proof," added Hawkins. "But everyonebenefits when we take the paperout of the process. FSA account administratorsdifferentiate their productofferings while lowering costs, and participatingretailers deliver a meaningfuland compelling service to attract andretain their customers with FSAaccounts."

Research has indicated that the averagehousehold with an FSA accountuses it for <50% of their eligible purchases.Oftentimes, consumers reportedthat they do not use their FSAaccount because they are unaware ofwhat health care purchases their planpermits or because the claims processis a hassle and not worth the benefit.

Greg Beasley, senior vice president ofsales and marketing at the company,said, "10% of Americans have [an FSAor HSA (health savings account)]. Yet,their FSA debit card is not front andcenter in people's minds. So they willuse it for a doctor's visit but not for abottle of aspirin."

The convenience factor with theFSAok AnyCard allows consumers toenjoy their tax-advantaged accountswithout problems. The program allows aconsumer-directed health care accountadministrator to bridge the gap betweenan employee's moderate interestand active participation. The card also iscompatible with existing FSADebit Card programs. Fornational retailers, integrationis easy. Consumers will knowwhich retailers offer the programwhen they see theFSAok logo, which will beavailable later this year. Foradditional information, visitwww.FSAok.com.