FSA new "Bennie" Cards - anyone?

[Guest jgroves]

I've been reading about these new "Bennie" cards for use with an FSA. Anyone out there use them? Do they work with just the medical or Dependent care as well? Does anyone forsee problems? Either post or contact me directly. Thanks!!

[SLuskin]

We have been solicited by a few of the companies that offer them. I have some concerns and so haven't done it yet. For example, if used at a pharmacy, we would not be able to tell if a prescription is cosmetic, not permitted by provisions of a particular plan document, who the prescription is for (domestic partner, a parent who is not a dependent??) Or, if at a dentist's office, for procedures like teeth bleaching or some of the new products that they sell you there. How to differentiate date of service from date of payment. I have heard stories where people figured out how to manually by-pass the system and have purchased potato chips and gasoline.

That being said, when some of these kinks are worked out, we will really look seriously at using these cards.

[mroberts]

I had one of the leading companies in the market come in and give me an overview and it seems pretty safe to me. Yes, there's going to be people that manipulate the system even when it comes to the Little League World Series. However, it seems like these companies have put a lot into making sure the charges being put on these cards are legitimate.

There aren't too many people other than benefit professionals out there that would know the ins and out os FSA plans. Since this is the case, I wouldn't be worried about your employees trying to cheat the system. Who's going to take the chance of putting a $1000 into a flex plan to use for groceries? There will always be someone out there, but I would say it's a good investment with these cards.

Now, if an employee does find a way around it, as far as penalties for the employer, that I haven't heard anything on yet. I would assume you wouldn't be held responsible, but this is the U.S., not Europe.

[GBurns]

What made it seem safe. Did they resolve the verification and substantiation issues that SLuskin pointed out?

The improper use of an FSA card does not require "professional" knowledge, it only requires improper or inadvertent use. If an employee goes into a pharmacy to fill a presription for their daughter who is not covered under the plan and at the same time picke up some other items then presents the FSA card just like they would present any Debit Card, and the cashier processes it just as they do for every other Debit Card, how will the system prevent this? That is what Sluskin pointed out and which you missed.

As far as penalties go I must point out that the penalties are the same as they have always been for any other improper reimbursement...possible disallowance and disqualification of the entire plan. There have always been these penalties for employers and administrators and who would be held responsible in the U.S.

[Guest jgroves]

Spoke with the Rep. from the Bennie Card last night. Here is the deal. They are NOT a TPA. They will work with whoever is running your FSA plan and coordinate with them. Also, they do not have a mechanism for Dependent Care at this point because a lot of the "mom 'n pop" day care centers don't take credit cards so it's not worth it to them. My feeling is that they are on the right track, but not quite there yet. In a few years, I think every FSA will have something like this in one form or another.

[mroberts]

I didn't miss that point of SLuskin's at all. There are codes assigned to every single product on the market, usually via the bar code. If someone tries to add shampoo and conditioner in addition to his or her prescription drugs, the debit card will recognize the codes as not reimburseable immediately and the sale will not go through. The sales for every item being submitted via the debit card are double checked, so if the item happened to slip through the first time, it would be caught by the TPA handling the FSA. I'm can't recall how the adjustment is made (sending a bill to the employee vs some other employer mechanism), but there are safeguards.

[GBurns]

I have yet to see any card, debit card, credit card, "bennie card" or any card that can recognize or that is ever given the product bar code. No card has scanning capabilities. The card is swiped for the total amount that is accumulated on the cash register. It is not swiped for the individual products. It also does not have any way of knowing if the amount being paid is for the use of the cardholder or if the cardholder is just paying for someone else's amount.

[mroberts]

I would suggest you give Ameriflex a call and have them give you a demo. There are measures in place to prevent people ringing up bags of potato chips and Advil at the prescription counter. Obviously nothing I'm going to say is going to convince you otherwise.

[Guest Carolynn]

I agree with MRoberts, I saw an online demo, with MBI, not Ameriflex, but it seemed relatively safe and very appealing to us. Additionally, as the TPA you can decide whether or not to request receipts from the purchase (the ee has to send them in). Now I know that seems like it defeats the purpose, but for the concerned, it may help to allay fears, especially in the beginning. We've giving the card serious consideration.

Are there any other providers out there to consider?

[GBurns]

Yes, you have the option of requesting that the employee send in the receipts upon request. But, this would be after the purchase has been paid for. Also how would you know which employee and which employee's purchase to request the receipt for? And what happens if the employee does not send the receipt in? And what happens if the purchases exceeded the employee contributions and the employee refuses to submit the receipts and/or the employee leaves the job?

[Guest Carolynn]

As I understand it, the card is controllable - if the ee is not cooperating, the card can be shut down, temporarily or permanently. Also, I don't believe the limit can be exceeded, the card won't work once the limit is reached.

Still wondering, are there any other providers available other than MBI? I am under the impression there are a couple major competitors, but they sure hide well, can't locate them anywhere.

[Guest lschaab]

Go to the website of Motivano, they have an FSA card to offer as an alternative to the other guys card. Ask about their beta program with the pharmacies.

Good luck.

[GBurns]

It seems that Mbi might hold the patent and is really sublicensing most of the cards. I would ask them for a list of their licensees from which to make a choice.

[SLuskin]

DataPath is working on one of these cards as well. I was speaking with them about the concerns I expressed, particularly the one about "who is the recipient of the service?" They are aware of the shortcomings and apparently are working on it. It is not ready yet, but I will be looking at it when it is.

Even if these cards could read the barcodes, which I don't think they can, having seen a few demonstrations, if any of you are using them, how do you determine if the person for whom the prescription was filled was a qualified person under the plan? I know alot of people who still pay medical bills for their over age 25 kids, or for their non tax dependent parents. What would prevent the plan from reimbursing those expenses?