Shoud I use the "credit" card attached to my health spending account

January 16, 2012 6:48 AM

Should I use the Mastercard sent from my pre-tax health spending account company? The literature says it simply draws down on my account, but I'm suspicious that there's a catch.

None of the literature says anything about associated fees or any other way that using the card reduces my available funds. In the past I've simply submitted reimbursement forms along with receipts. This would be much easier, but I'm trying to figure out how it makes money for the spending account company, and if it does, whether it does so at my expense.

Will the card show up on my credit report, or is it just like a gift card?

posted by OmieWise to Work & Money (14 answers total)

It's probably just a debit card that uses MasterCard as the payment processor. I've had them for the past ~decade with no catch.
posted by chesty_a_arthur at 6:52 AM on January 16, 2012

We had those through my wife's last employer. It wasn't as great a thing as it seemed at first because the administrating company frequently required supporting documentation to ensure the card was being used for eligible expenses, which meant I still had to retain receipts and be prepared to send in copies of them like I always had without the card. Didn't have any credit or fee-related problems, though.
posted by jon1270 at 6:55 AM on January 16, 2012

The catch is that it makes your life much much easier.

You use the card only for qualified medical expenses. It comes out of your HSA and that's it, you're done.

The alternative is for you to pay for you qualified medical expenses yourself and then file for reimbursement. That's much more work, is much more complicated, and takes much longer. You are out cash in your pocket while you're waiting weeks or months to get around for filing and then getting reimbursed.

Use the card.
posted by alms at 6:55 AM on January 16, 2012 [2 favorites]

I had no problem using my card for a HSA account. However, like jon1270 I still had to submit receipts to the benefit company.
posted by saffry at 6:59 AM on January 16, 2012

When I use my card directly at a medical provider (for copays) or at the grocery store for HSA expenses (somehow, the computer just charges that amount to my card and I use my regular card for the rest), I've never had to submit expenses.

When I use the card to "reimburse myself" - i.e. I pay cash at a doctor for a copay and then buy myself dinner with the HSA card, I have to submit expenses.

Any expenses associated with the cards are covered by the employer/HSA provider.
posted by dpx.mfx at 7:02 AM on January 16, 2012

It doesn't so much "make money" for the company, it probably reduces their cost of processing in some manner.

And, as mentioned above, there really isn't any downside catch for you, unless you love filling out forms and faxing them in.
posted by HuronBob at 7:02 AM on January 16, 2012

Nthing that this is just a debit card for your HSA and processing fees don't come out of it. We have the same arrangement, although we haven't been asked to submit documentation for payments (mostly for prescriptions, physician visits, and labs, so they have documentation anyway).
posted by immlass at 7:03 AM on January 16, 2012

We just signed up for the company HSA and opted for the MC as well. No real catches, though we've also been told by others to hang on to the receipts for awhile anyway, as they reserve the right to ask for them for verification if the expense isn't something that is automatically categorized by the merchant.
posted by jquinby at 7:06 AM on January 16, 2012

It is likely that your HSA administrator is getting a small cut of the credit card fee that your health care providers provide to Mastercard. This arrangement is similar to alumni credit cards for Universities or branded non-profit cards.

You are paying the opportunity cost of receiving credit card rewards or cash back. You should have at least a 1% cash-back credit card, so using the HSA debit card means you are paying 1% too much for your health care in exchange for not filing out expense reports. Whether that is worth your time is up to you.
posted by saeculorum at 7:35 AM on January 16, 2012 [1 favorite]

I've used mine for three years, in both doctor's and dentist's offices, and at the store for drugs/prescriptions/medicine. I've never been ask to submit expenses.
posted by kimdog at 8:48 AM on January 16, 2012

You should have at least a 1% cash-back credit card, so using the HSA debit card means you are paying 1% too much for your health care in exchange for not filing out expense reports.

The other thing you get is that you don't have to use your non-HSA funds to pay bills until you are reimbursed.
posted by grouse at 9:13 AM on January 16, 2012

I didn't have to submit receipts, presumably because I only used it for one thing, and that was at a doctor's office. (LASIK, in fact- best money I ever spent.)

One thing I encountered, though was that it had a per-charge limit of $500, but there was no problem with us running the card 4 times to get to the $2000 partial payment I was trying to make-- that's all I had in my HSA.
posted by Sunburnt at 9:23 AM on January 16, 2012

My company offers an HSA with a local credit union, and I love it. They deposit a little per paycheck. I contribute a little also, because hey it's pre-tax and it stays there until I use it (mine is set up so I can take it with me indefinitely even when I leave, but yours may be different). I figure, I'll definitely need money for medical expenses at some point. Anyway, we have a visa debit card, so all I have to do when I go to pay at the doctor is pull it out and it's done. I've never been required to submit receipts (but I've never used it outside of a medical facility/dentist/eye doctor).

To answer your second question: It's funded by you as a savings account, so you can't spend or borrow more than you have. It's just a debit card on that account, not a credit card that gets reported to credit bureaus.
posted by ilikemethisway at 9:46 AM on January 16, 2012

Response by poster: Thanks everyone. All good answers.
posted by OmieWise at 2:53 PM on January 16, 2012