Used with permission 4-16-08
From: Burdick, Terri [mailto:email@example.com]
Sent: Wed 4/16/2008 8:58 AM
To: Ric Joyner
Subject: RE: HSA claim info urgent. EFG:000515066
We haven’t analyzed our debit card transaction data personally, but I just returned from the HSA White House briefing and this was a big topic. Evolution Benefits reviewed over 1.5 million transactions from 2007 and found that about 23% of all transactions and 12% of costs came from non-health categories. After removing grocery stores and the Wal-Marts of the world (with both health and non-health categories), 5% of costs were from non-health categories. This feels significant to me. My concern: if non-qualified expenses outpace excise tax payments, HSAs could be doomed. I don’t agree, however, that federal substantiation legislation is needed. If that’s the case, the next would be substantiation of HELOC purchases and IRA distributions – a bit of a nightmare. I think we need to do what we can to block non-health categories on debit cards, educate on the excise payment requirements and encourage the IRS to make the HSA reporting forms more user-friendly.
Ric Joyner: I predicted the abuse back in 2004 because as a TPA we see it everyday with FSAs, HSAs and HRAs.