Online healthcare purchasing is here to stay: Here’s how to get in on the trend

To avoid crowded stores and businesses during the COVID-19 pandemic, consumers have turned to online buying at an impressive rate. According to an Accenture report, those who previously didn’t make online purchases “plan to increase their ecommerce purchases by 160% during the pandemic.” Separately, the Adobe Digital Commerce Index measured a $77 billion increase in U.S. online consumer spending over expectations from March-June 2020.

This ecommerce trend includes healthcare spending like prescriptions, personal care and home medical items, presenting an opportunity for the consumer-directed healthcare (CDH) industry. The U.S. government, recognizing a growing need for easier access to affordable out-of-pocket medical expenses during the pandemic – both in person and online – passed legislation that significantly expands the number of over-the-counter (OTC) items eligible for purchase with health savings account (HSA), flexible spending account (FSA) and health reimbursement arrangement (HRA) funds.

Benefits administrators have a unique opportunity to help their employer clients take advantage of the new and growing health ecommerce landscape, ultimately increasing convenience and financial wellness for healthcare consumers. Here we discuss the merits of various online retailers for FSA-, HSA- and HRA-eligible purchases, risks to be aware of and available technology for bringing health ecommerce directly into the hands of consumers.

Sites devoted exclusively to FSA-, HSA- and HRA-eligible purchases

Even before COVID-19 hit, trends in online and app-based shopping were on the rise. Pharmacy retailers like CVS and Walgreens allowed tax-advantaged purchases online, as did other big retailers like Walmart. Online-first retailers like Amazon worked to make FSA and HSA purchases more noticeable to consumers, too.

Very few online retailers have focused exclusively on an FSA- and HSA-eligible shopping experience, however. FSA Store (and its sister site HSA Store) is one of them, offering several advantages based on years of experience in the market. By focusing exclusively on FSA- and HSA-eligible items, FSA Store takes the guesswork out of shopping for out-of-pocket medical and personal wellness items. Other online retailers like Amazon, on the other hand, don’t always categorize items by eligibility, instead mixing eligible and non-eligible items together during the shopping experience. Much like shopping in many physical locations, consumers may only know for sure if an item qualifies for reimbursement at the point of sale, resulting in unexpected card declines. Amazon’s algorithms can further complicate the purchasing process. As a CNBC article points out, “Some items [on Amazon] qualify for FSA spending when you buy a single unit, but a set of three doesn’t get the FSA qualification in your shopping cart.”

In addition to a clear line of sight into which items are eligible, FSA Store has a distinct advantage when it comes to the payment process. Where some online retailers will decline a health benefit card if the total order balance exceeds the card’s available balance, FSA Store allows partial payment, giving shoppers the option to use multiple forms of payment upon checkout. For example, if someone makes a $250 purchase but their card balance is only $200, they will be prompted for an additional form of payment to cover the remaining $50. FSA Store takes it a step further by offering debt forgiveness – covering 10% (up to $20) of a purchase when a card balance is insufficient. Finally, FSA Store charges at the time of purchase rather than the time of shipment, allowing people to make purchases up until Dec. 31 that will count toward that plan year even if shipment takes place after the new year.

Avoiding risk when shopping online

Although online shopping has become commonplace, some risks remain, including in the health ecommerce space. Major sites like Amazon sometimes display counterfeit products, posing a danger for consumers’ health and forcing consumers to take on more of the responsibility for researching their selected products. Expired products can also put consumers at risk. Amazon has specific guidelines that place the onus on consumers for tracking expiration dates, where exclusive sites like FSA Store maintain direct relationships with its manufacturers to guarantee product safety, authenticity and quality.

To add to the secure and trusted shopping experience, FSA Store has also invested heavily in tailored support. They have FSA and HSA experts available 24/7 via phone, chat and email. In the event a purchase gets denied, representatives at FSA Store work directly with third-party administrators (TPAs) to reverse it. The broader FSA Store team develops informational content to inform users about their accounts, and also works to create tailored content for its TPA clients to use within their own portals and apps.

Health ecommerce in the palm of your hand

Although COVID-19 has spurred the increase in online shopping, the shift doesn’t appear to be temporary. The Accenture study from earlier says that 42% of shoppers plan to continue shopping online after the pandemic and, perhaps more notably, more than half will continue do so via mobile app.

The Alegeus Smart Account experience, now available to all clients, has answered the growing need for personalized, AI-driven insight into healthcare coverage, care and savings strategies – including finding and making the most financially-savvy purchases directly from within a mobile app. Later this summer, Smart Account will finalize an integration with FSA Store, which will allow users to shop for FSA- and HSA-eligible items directly within the app. This shopping experience will not only allow consumers a more convenient way to shop for health and wellness purchases, but also improve financial wellness by delivering timely coupons based on account balance, time of year and personal health needs to make tax-advantaged purchases even more cost-effective.

If you’re ready to take advantage of the Smart Account experience and its integration with the FSA Store during a time of heightened health ecommerce activity, contact us.