Everything you need to know about Health Payment Accounts

Navigating healthcare expenses can be overwhelming and stressful for both employees and employers. Healthcare costs are projected to rise 8%, the highest level in 13 years, according to PwC’s Health Research Institute.¹ These rising costs—and complex insurance systems—often leave individuals feeling unprepared, while businesses struggle to find solutions that balance cost with employee satisfaction.

Enter Health Payment Accounts (HPAs), a unique and innovative tool designed to ease the financial burden of out-of-pocket costs, encouraging care without delay. HPAs provide a flexible way to manage healthcare costs, offering benefits that can help employees take control of their budgets and streamline administration for employers.²

But what exactly are HPAs, how do they work, how can they be paired with Health Savings Accounts (HSAs), and why should businesses consider integrating them into their benefits offerings? In this article, we’ll break it down and explore how HPAs can transform the way you can support your workforce.

What are HPAs?

An HPA is an employer-sponsored, flexible payment tool that gives employees immediate access to funds for healthcare costs without interest or fees. Provided by our partner Paytient, HPAs work by breaking down out-of-pocket medical, dental, vision, or even veterinary expenses into manageable installments that employees can pay back directly from their paycheck, bank account, or HSA, making healthcare costs more predictable and less daunting.

HPAs are available to any eligible employee, regardless of healthcare plan or benefits coverage. They don’t even need to be enrolled in a specific benefits plan to access HPAs, ensuring that any eligible member of your team can access the funds they need for care.

How do HPAs work?

HPAs are simple, yet effective. Here’s how the process typically goes:

1. Access the HPA: Eligible employees sign up for their HPAs through the Paytient portal. Once approved, they receive access to funds they can start using immediately.

2. Cover out-of-pocket costs: HPA members can use their funds to pay for eligible medical, dental, vision, prescription, and veterinary expenses. Better yet, employees can also use their HPA to cover healthcare expenses for their family members, dependents, and even their pets³–extending its benefits to their loved ones.

3. Plan flexible repayments: Employees are then enrolled in a payment plan that aligns with their budgets. They can repay their HPAs through a bank account or payroll deduction, or by using their HSA funds.

HSAs and HPAs: Unlocking financial flexibility

HSAs and HPAs can work together to provide greater financial flexibility for managing healthcare costs. An HSA is a tax-advantaged savings account paired with high-deductible health plans (HDHPs), which allows individuals to set aside pre-tax dollars for future qualified medical expenses.⁴ Contributions to an HSA are tax-free, and the funds grow tax-free, offering a powerful way to save for both current and future healthcare expenses.

HPAs, on the other hand, provide additional support for covering out-of-pocket or unexpected healthcare costs. Together, these accounts create a comprehensive system that helps individuals manage their medical expenses strategically.

Let’s look at a scenario. One of your employees is getting their child a new pair of glasses. They could, of course, use their HSA to pay for them, but they might have to withdraw more than they would like to cover the bill. But, if they also have an HPA, they can choose to use it instead, so they don’t have to tap into their savings.

When used in tandem, HPAs and HSAs enhance financial flexibility and ensure individuals are better equipped to handle both routine and unforeseen medical expenses.

Why should businesses offer HPAs?

From an employer’s perspective, HPAs represent an opportunity to demonstrate commitment to your workforce’s health and financial wellness. Here’s what you can gain by including HPAs in your benefits portfolio:

• Enhanced retention and satisfaction. Offering HPAs shows your team that their health and financial peace matter. This type of tangible support can boost morale, reduce stress, and foster loyalty among team members.

• Cost-effective implementation. You’ll pay a simple subscription fee to make HPAs available to your employees. There are no complex or hidden costs associated for your business or team, making this an affordable and sustainable addition to existing benefits packages.

• A competitive edge in recruitment. With the job market becoming increasingly competitive, unique benefits like HPAs give businesses an edge. Demonstrating genuine care for your team’s wellbeing can attract top-tier talent.

Debunking common questions about HPAs.

Q: Can my team use their Health Savings Account (HSA) funds to repay their HPA balances?

A: Yes! They can use HSA dollars to repay an HPA balance. They simply need to opt into that payment option, rather than a bank account or payroll deduction.

Q: What happens if my employees struggle to manage their HPAs effectively?

A: If financial circumstances change, your eligible employees can easily adjust their payment plans by contacting the Paytient customer support team.

Q: Will managing HPAs add administrative work for my business?

A: No, there’s no extra burden for businesses. All communication happens directly between the HPA member and Paytient.

Q: Are there any costs for employees to use an HPA?

A: No, HPAs are free for your team to use. There are no hidden fees, interest, or extra charges associated with accessing their benefits.

Q: How do employees access their HPA funds?

A: Employees can access their HPA funds through an easy-to-use app or online platform. This ensures they can manage their HPA securely and conveniently whenever needed.

Q: Can HPAs be used for all types of healthcare expenses?

A: HPAs are flexible and can be used for a variety of healthcare expenses, such as doctor visits, prescriptions, dental procedures, vision care, and vet care for their furry friends. Employees can confirm eligible expenses with their HPA provider.

Unlock the benefits of HPAs.

With employee healthcare affordability becoming an increasingly important challenge for businesses to tackle, it’s time to explore innovative solutions like HPAs. These unique tools can enhance retention, recruitment, and overall workplace satisfaction while providing your team with a tangible way to manage healthcare expenses.

So why wait? Consider how HPAs can positively impact your workforce’s wellbeing and financial resilience. Visit our HPA page to learn more.