For the most part, Health Spending Accounts (HSA) are marketed and administered by reputable firms with a proven and documented track record. Unfortunately, the industry is unregulated and there are no barriers to entry.
Dig beneath the surface and find out the warnings signs of a HSA provider that is cutting corners.
1. No transparency
The collapse of the world's financial markets in 2007 eroded public trust in many institutions. Consumers experienced unprecedented levels of wealth erosion and many were forced into bankruptcy. Fear and a lack of trust are still top of mind due in part to the rise in the number of Ponzi schemes and other ploys to fool investors.
In 2014, it is evident to the business community that transparency plays a critical role in earning consumer trust - particularly in the financial services industry.
Consider the following questions when you're researching your Health Spending Account options:
- Do you have access to the provider's financial statements?
- Does the provider have an external auditor?
- Is the provider accountable for their actions? What regulatory bodies do they report to?
- How is your personal data accessed and stored?
2. The mailing address is a PO BoxHow would you feel sending your family's medical history, banking information, and company cheque to a PO Box? What guarantee do you have that you will receive a reimbursement?
3. No IT infrastructure
To secure your medical, financial, and personal information, a business needs to deploy significant resources to develop their IT infrastructure. Look for the following capabilities to verify the provider's IT competence:
- Secure online account access
- Secure online applications
- Secure online claims
- Secure payment gateway
Many new, small providers do not have the resources to develop their Information Technology. Not only will your service level be compromised, but your key personal data may be at risk. A quick look at the provider's website should give you a strong indication of their competence.
Some other points to consider
- How long have they been in business?
- How many customers do they have?
- How many claims do they process in a year?
- What is their audit process for claims?
- Are they Canada wide?
- Who are the key individuals behind the company?
- Has the company been recognized for industry awards?
Take your time and perform due dilligence before you make a decision.
Are you a small business owner with no arm's length employees? Take a look at our Beginner's Guide to Health Spending Accounts.