Everything you need to know about Health Payment Accounts

Key takeaways

• Health Payment Accounts (HPAs) are employer-sponsored tools that give employees immediate, interest-free access to funds for medical, dental, vision, and veterinary expenses, repaid through payroll deductions, a bank account, or a Health Savings Account (HSA).
• HPAs and HSAs can work together: HPAs cover out-of-pocket costs without depleting HSA savings, giving employees greater financial flexibility.
• Offering HPAs costs employers a simple subscription fee with no administrative burden, and can boost retention, employee satisfaction, and recruitment.

Navigating healthcare expenses can be overwhelming and stressful for both employees and employers. Healthcare costs are projected to rise 8%, the highest level in 13 years, according to PwC's Health Research Institute.¹ These rising costs, and complex insurance systems, often leave individuals feeling unprepared, while businesses struggle to find solutions that balance cost with employee satisfaction.

Enter Health Payment Accounts (HPAs), a unique and innovative tool designed to ease the financial burden of out-of-pocket costs, encouraging care without delay. HPAs provide a flexible way to manage healthcare costs, offering benefits that can help employees take control of their budgets and streamline administration for employers.²

But what exactly are HPAs, how do they work, how can they be paired with Health Savings Accounts (HSAs), and why should businesses consider integrating them into their benefits offerings? In this article, we will break it down and explore how HPAs can transform the way you support your workforce.

What are Health Payment Accounts (HPAs)?

Health Payment Accounts (HPAs) are an employer-sponsored way to help employees cover out-of-pocket healthcare costs right away, without interest or fees. Provided by our partner Paytient, HPAs work by breaking down out-of-pocket medical, dental, vision, or veterinary expenses into manageable installments that employees can pay back directly from their paycheck, bank account, or HSA, making healthcare costs more predictable and less daunting.

HPAs are available to any eligible employee, regardless of healthcare plan or benefits coverage. They don't even need to be enrolled in a specific benefits plan to access HPAs, ensuring that any eligible member of your team can access the funds they need for care.

Here is the key takeaway for benefits teams: HPAs can make care feel more accessible for employees, while keeping the experience simple to offer and support.

How do Health Payment Accounts (HPAs) work?

HPAs follow a straightforward flow that is easy to explain during onboarding or open enrollment communications:

1. Employees access the HPA: Eligible employees enroll through the Paytient portal and, once approved, can use funds immediately.
2. They use funds for eligible expenses: Employees can use HPA funds for out-of-pocket medical, dental, vision, prescription, and even veterinary expenses. They can also cover expenses for family members, dependents, and pets.³
3. They repay through flexible options: Employees repay via payroll deduction or a bank account, and they can also choose to repay using HSA funds for qualified expenses.

Turning a large bill into predictable payments can reduce the “delay care” cycle that often shows up when costs feel uncertain.

How can HSAs and HPAs work together?

HSAs and HPAs solve different problems, and that is why they pair well.

• An HSA helps employees save and pay for qualified medical expenses with tax advantages, when used appropriately.⁴
• An HPA helps employees handle unexpected or high out-of-pocket costs now by spreading payments over time.

Let’s look at a scenario. One of your employees getting their child a new pair of glasses. They could use their HSA to pay for them, but they might have to withdraw more than they would like to cover the bill. If they also have an HPA, they can choose to use it instead, so they do not have to tap into their savings.

When used in tandem, HPAs and HSAs enhance financial flexibility and ensure individuals are better equipped to handle both routine and unforeseen medical expenses.

Why should employers offer HPAs?

From an employer's perspective, HPAs represent an opportunity to demonstrate commitment to your workforce's health and financial wellness. Here's what you can gain by including HPAs in your benefits portfolio.

Unlock the benefits of HPAs

With employee healthcare affordability becoming an increasingly important challenge, it is time to explore innovative solutions like HPAs. These tools can enhance retention, recruitment, and workplace satisfaction while providing your team with a tangible way to manage healthcare expenses.

So why wait? Consider how HPAs can positively impact your workforce’s wellbeing and financial resilience. Visit our HPA page to learn more.

Frequently Asked Questions about Health Payment Accounts (HPAs)

What is a HPA and how does it help employees manage healthcare costs?

Can my team use their Health Savings Account (HSA) funds to repay their HPA balances?

Are there any costs for employees to use an HPA?

Are HPAs available to all employees, regardless of their health plan?

Can HPAs be used for all types of healthcare expenses?