A health saving account (HSA) and a flexible spending arrangement (FSA) are used for saving for medical costs. In other words, they help people with health insurance to set aside funds for health care costs. Users receive debit cards for their account and they can use it to pay for the costs, which are also known as qualified expenses. Nevertheless, the cards are different, and understanding their differences is a crucial step towards making right decisions. For instance, FSA and HSA have varying tax benefits. Ultimately, organizations need a way of knowing the account in use and to understand their respective features and benefits.
Organizations, especially in the healthcare sector, should ensure that they can accept HSA and FSA cards. In effect, it is vital to understand the different between the two health spending accounts, as well as their regulations and requirements.
A health savings account is not for everyone. Instead, it is available for people with a high-deductible health plan (HDHP). An HDHP has deductibles of $1,350 and $2,700 for an individual and family respectively. The plans also have their amounts capped at $6,550 for an individual and $13,100 for a family per year. An HSA account holder accumulates funds to be used for medical expenses by the owner. Members with HDHP as their only health insurance plan qualify for an HSA. Unused balances in HSA are rolled over into the next year.
A flexible spending arrangement does not have eligibility requirements. Moreover, they are not linked to HDHP's and can be used with any health plan. However, its contributions for 2018 are capped at $2,650. The cap figure can be adjusted at open enrollment, or with a change in family or employment status. Unlike in an HSA where unused balances are rolled over into the next year, an FSA account requires users to utilize or forfeit the unused balance. In other words, FSA money expires at the end of the year, therefore, users will not be able to retain the funds left in the account at the end of the year.
Notably, both accounts have stored value cards that make it easy to pay of eligible health care costs. The card allows users to electronically access their account funds. They can also be used at merchants that accept cards. The purchase amount is deducted automatically from the account and transferred to a merchant or provider.
BinBase.com Can Help Merchants Identify HSA and FSA Accounts
BinBase.com can help merchants identify a debit card used for either an HSA or FSA account. BinBase.com provides a lookup service that features a database with hundreds of BIN records from numerous card brands. The database has an easy to understand format that contains a series of fields. For instance, BinBase.com offers a record such as the one shown below:
510460;MASTERCARD;U.S. BANK, N.A.;DEBIT;HSA NON SUBSTANTIATED;UNITED STATES;US;USA;840;WWW.USBANK.COM;1-800-US BANKS
From the above record, merchants can easily identify a card being used either for an HSA or FSA account. Unlike other debit cards, FSA or HSA cards cannot be used at all merchants that accept cards for transactions (IRS requirements). Therefore, a lookup service offered by BinBase.com can automatically detect the card type and determine if it can be used for a particular transaction. In most cases, the cards are accepted by medical providers and merchants with an inventory information approval system (IIAS).
Additionally, the above records are accurate and complete to support businesses to make sound decisions that enhance their revenues. Distinguishing between the two cards and understanding the requirements increase the likelihood of successfully processing the cards. You can read my complete BinBase review.