For most Americans, dealing with an unexpected medical bill is a question of when, not if.
According to a recent ValuePenguin survey, 61% of Americans reporting receiving a surprise healthcare bill before, with an average bill total of $520. In fact, 54% said they’d gotten an unexpected medical bill just in the last year.
And for the vast majority of survey respondents, these bills weren’t minor items they could gloss over. Nearly 3 in 4 respondents reported that if they received a surprise medical bill, they would be “significantly set back financially”.
When health savings accounts (HSAs) were enacted nearly 20 years ago, they were supposed to be a way for hardworking Americans to save money on their medical expenses. And for the ones fortunate enough to be able to save and invest, they succeeded.
The problem is that for the majority of Americans, the ones who face significant challenges with paying an unexpected $500 bill, the traditional HSA model just does not work. While FSAs allow account holders to spend their full annual election at the start of the plan year if needed, HSAs have traditionally required account holders to contribute funds in their accounts before they can use them.
For Americans struggling to cover a surprise $500 expense, making HSA contributions may not be at the top of their priorities. This could be why a recent JAMA Network survey found that the majority of HSA account holders had not contributed any funds into their HSAs in the last 12 months.
The traditional HSA model is not adding value for the hardworking Americans who could most use the savings. However, the innovative and inclusive Lane Health solution changes everything by unlocking HSAs to truly work for everyone.
For members who may not have enough money in their HSA to pay for a medical bill, the Lane Health HSA comes with an Advance* feature that, once activated, allows them to access additional swipe-and-go funds. There are no credit checks required for the Advance*, meaning all employees can have access to more affordable and accessible healthcare.
Once the Advance* is activated, members simply swipe their cards to access on-demand funds up to an approved limit whenever needed. The funds and associated fees can be repaid over 12 months via pre-tax payroll withholding, meaning members have ample time to pay for unexpected medical bills. In addition, due to the HSA tax savings on pre-tax repayment, members’ Advances* typically end up being cheaper than paying with cash**.
With Lane Health, HSAs don’t just work for the few who can afford to contribute and save anymore. Now, employees can have peace of mind, knowing they can take advantage of swipe-and-go access to a dedicated healthcare line of credit* whenever the need arises.
While surprise medical bills will likely continue to pop up, Lane Health and the Advance* offering makes them manageable, giving everyone the chance to sleep easier at night. We’d love to bring this solution to your employees too! Just drop us a line, and we’ll be happy to help make healthcare work the way it should for your people.
* Advances issued by WebBank
** Savings based on 7.65% Payroll taxes, 12.35% combined federal/state tax rate offset by 10% fee paid pre-tax. Savings will vary depending on individual tax situations