merchant limited debit cards

[jmor99]

I am aware that neither an employer nor a TPA can "adjudicate", question, deny, etc. HSA monies. There are a number of TPAs record keeping HSAs for employers whose employees have been given a merchant limited debit card (as opposed to a typical bank VISA or MasterCard).

Could the use of these merchant limited cards (vendor or TPA selected by the employer) be construed as employer meddling in how the employee spent their HSA dollars?

[leevena]

You are correct, but perhaps there may be some confusion about the wording being used in the marketplace. Yes, the HSA account holder is responsible for the funds and how they are distrbuted. Where I believe there may be some confusion is what services the adminstrators are using. The administrators that I have seen who offer "adjudication of claims" is not actually denying the claim, rather, they are just providing an opinion about the claim. Could this be what you are running into?

[jmor99]

Leevena: No. There is no claims adjudication. The TPA is merely record keeping, answering questions, etc.

So the TPA is not interfering. I am talking about the type of debit card used. If I have a checking account at a bank, I can use my debit card anywhere and for anything. However, if I have a merchant limited debit card for my HSA account, I cannot use that debit card (it will not work) at non-health care related businesses. For instance, it will work at a drugstore, but not at the gas station. Is this employer interference due to the fact they selected an HSA vendor using that type of card instead of the traditional VISA/MasterCard used by your average bank?

[leevena]

jmor99. Thanks for the reply, I was focusing on the administrator, not the card. The use of the limited debit card is ok, and does not interfer with the employee. Who knows, someone may challenge this legally in the future, but for now it is ok. Just because someone has a limited debit card, does not preclude them from spending those dollars illegally. There are situations where the card is not used (did not bring it with them, vendor may not have card processing capabilities, etc.) and the employee uses cash and submits a claim.